SYNOPSIS: Hong Kong-based Asia Capacity Exchange (ACE) becomes the first Asian firm to enter the bandwidth-trading arena, following in the footsteps of Western pioneers like Arbinet-theXchange and Band-X that aimed to trade international bandwidth capacity like pork bellies and other commoditized products, making it easier for carriers to buy and sell capacity, and cutting down set up times from several months to hours or even minutes.

THEN: One key differentiator for ACE is its Asian presence, which is particularly pertinent given Asia's increasingly liberalized environment. ACE chief executive Paula Brillson says that the number of new players looking to buy and sell capacity is escalating as markets continue to open up to competition, while capacity itself is becoming a commodity as more new submarine cables are being deployed in the region. "Rates change so quickly that it is actually hard to know whether you are getting the best deal," she says.

NOW: ACE became a casualty of the dot-com bubble bust, shutting down its operation two years and two months later in May . Its online assets were eventually taken over by ITquotes Corporation, which offers pricing on voice and bandwidth services. The industry recession wasn't the only factor--for example, some observers said that one of ACE's disadvantages was its inability to facilitate trades in real time: However, by bandwidth trading had become hobbled by other market realities--namely perpetually plunging bandwidth prices and the drop in demand as massive Internet traffic growth failed to materialize. Another problem was the emergence of services such as co-location facilities and VoIP clearinghouses that made bandwidth deals and interconnection easier. Despite this, there's no shortage of bandwidth trading platforms in operation today, with pioneer companies like Arbinet-theXchange and Band-X still dominating the sector. However, bandwidth trading still accounts for a mere fraction of total bandwidth transactions.

COPYRIGHT Advanstar Communications, Inc.

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