Telecom trading exchange debuts

A newly-formed, Washington, DC-based company is operating an Internet brokering service for telecommunications companies to buy and sell bandwidth capacity internationally.

The Global TeleExchange Inc (GTX) Web site at www.TheGTX.com allows telecommunications providers to bid on and ask for rates for using capacity from other companies, as well as to offer capacity anywhere in the world.

The burgeoning number of telecommunications companies created by deregulation in many countries in recent years has led to the need for a middleman to help companies manage carrying capacity, GTX president Andrew Romans said last week.

Thousands of telecommunications companies now regularly look to buy cheap bandwidth, Romans said. Bandwidth is the amount of data that can be transmitted over a network in a fixed amount of time.

"If you are a telecommunications company and you want to compete, you have to have low rates," Romans said. "The telecommunications companies need to understand how to get bandwidth cheaply."

GTX charges both buyers and sellers a transaction fee based on the volume of capacity for each trade. A GTX team will help the parties negotiate their interconnect contracts, according to Romans.

The opportunity for such a brokerage may not last forever, one analyst said. Other companies, including New York-based Arbinet Communications, have already started similar services, said Bill Cornog, an industry analyst and manager of the Boston Consulting Group's Dallas office.

While there is a current need for such services, many telecommunications companies may eventually develop their own systems for buying and selling bandwidth capacity, Cornog said. And prices for carrying capacity between regions may even out as well, he added.

"Over time, the market (for carrying capacity) will become more efficient and the (price) differences will disappear," Cornog said.

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