Colt Tops Global Ethernet Market Post-Lumen EMEA Buy

U.K.-based Colt overtook its French carrier rival, Orange Business, in the latest Vertical Systems Group leaderboard of global Ethernet providers.

Vertical Systems Group (VSG) on Tuesday published its annual ranking of multinational ethernet providers, ranking carriers based on how many billable retail ports they operate outside their home country.

VSG credits Colt's acquisition of Lumen's EMEA business as a key reason it leapfrogged Orange. The sale closed in late 2023.

It's Colt's first time leading VSG's global Ethernet rankings.

“Colt ascended to the top rank in our global provider segment following key acquisitions and market growth beyond its Pan-European base," Vertical Systems Group principal Rick Malone said.

VSG's Rick Malone

On the other hand, VSG said Orange Business suffered from "service transformations and customer migration" in 2023 en route to losing the top spot it had held for two years.

Verizon and AT&T stayed in third and fourth place, although VSG noted only a "slim share differential" between the two.

BT Global and NTT slotted into fifth and sixth, respectively. Lumen disappeared from the leaderboard as a result of its divestiture to Colt, and Argentina-based Cirion replaced it in seventh place.

Global Ethernet Sees Upgrades

The latest report concluded that global provider Ethernet ports saw "low net growth" last year.

“The geographic expansion of the global Ethernet market continued in 2023, while several key domestic markets flattened,” Malone said.

At the same time, existing customers were investing in making upgrades to their ports. VSG said they are bolstering their Ethernet to enable cloud-based and high bandwidth applications and artificial intelligence (AI) workloads.

That observation matches with the trend of customers (and vendors) seeking larger compute and connectivity capabilities to power large-language models their expansive pools of data.

Advantage Communications Group CEO David Gardner and his team see trends in line with VSG's observations.

“We are very much seeing fewer circuits, but of much larger bandwidth," said Gardner, whose connectivity-focused MSP partners with companies like Colt and AT&T. "It's really a function of cloud, SaaS and other bandwidth-hogging applications."

Gardner said businesses are buying fewer circuits as a result of operating fewer offices. The recent COVID-19 pandemic say many companies shrink their real estate footprint and adopt long-term hybrid work strategies.

Advantage's David Gardner

The Channel in Europe

Some of the vendors on the leaderboard sell through indirect channel partners, while others, like Orange, largely prefer to sell direct to customers. American-based companies like AT&T, Verizon and Lumen have embraced resellers and agents as an important route to market than they would rather partner with than compete with. But among the European providers, the agent model – in which the carrier bills the end user and pays the partner a residual commission – is much less prominent than the wholesale model.

That's in part because the European carriers have not faced the groundswell of agent businesses that the U.S. market saw in the past decade. Regulation and competition also play a role. Although some U.S. carriers and cablecos hold local and regional monopolies, enough competition exists to make multi-carrier brokers valuable. On the other hand, many European telcos cover their entire country or even are government-backed, leading many of them to stick with direct sales.

And in the case of multinational networks in Europe, customers have often preferred to purchase through someone in their own country. To that point, Advantage has helped establish relationships with both European vendors and customers by hiring in-region personnel.

But Gardner said he sees more and more opportunities opening up for partners to work with carriers in an agent model.

“The providers in Europe at best are dipping their toes into the agent model. The big dominant players have not historically played in the agent game the way we U.S.-based partners know it," Gardner told Channel Futures.