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BUZZ: Like all online bandwidth exchanges, Arbinet has been struggling to build liquidity.
But if the stock soars, the real advantage could come from using it to buy other budding bandwidth exchanges.
Arbinet(Private) www.arbinet.com CHIEF EXECUTIVE: Anthony L. Craig MODEL: Marketplace DESCRIPTION: One of the best-funded bandwidth exchanges, Arbinet focuses on trading minutes of long-distance calling.
By some counts, 25 bandwidth exchanges have sprung up, a profusion which makes it harder for any one site to generate liquidity.
Arbinet (Private) www.arbinet.com CHIEF EXECUTIVE: Anthony L. Craig DESCRIPTION: One of the best-funded bandwidth exchanges, Arbinet focuses on trading minutes of long-distance calling.
Bandwidth exchanges are by far the most common type of B2B telecom site, though there are a handful of other players focused on the nitty-gritty business of selling telecom equipment online.
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Richard Elliott of Band-X, a leading bandwidth exchange, notes that bandwidth is quickly and easily transportable, without losing its value.
For example, Enron spent around $2 billion on its network capacity, or bandwidth, exchange, which never turned a profit.
By doing business through a bandwidth exchange, buyers win lower prices and sellers can unload excess capacity.
Enron, the energy and trading company, briefly ran an electronic bandwidth exchange before the company was brought down by financial scandal in 2001.
"There is no sector that illustrates creative destruction so effectively," said Howard Holme, president of Bandwidth Exchange, a capacity broker in Denver, referring to the theory of the economist Joseph A. Schumpeter that entrepreneurs generate innovation by rendering their predecessors' ideas obsolete.
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