Cogent expands market reach

Cogent Communications is growing, expanding the reach of its dedicated high-speed Internet access service into new markets, and into new buildings within existing markets.

The new markets are Phoenix, Arizona; Buffalo, New York; and Milan, Italy, with Zurich, Switzerland and Montreal, Canada coming on line within 60 days. Major new buildings are coming on line include the IBM Building and the NBC Tower in Chicago, and the CitiCorp building and 399
Park Ave. in New York City.

Cogent is reaching out to new customers in cities through which its network passed, or even where it had equipment that to this point was unused, said CEO Dave Schaeffer, as the company continues to see demand grow.

“We at Cogent have continued to grow at a substantial faster pace then underlying Internet,” Schaeffer said in a telephone interview. “As we have added sales people and as we have gotten more credibility in the market, are seeing an acceleration in our demand growth. The Internet growing at 75% a year but we are experiencing 190% traffic growth.”

Cogent offers Gigabit Ethernet, Fast Ethernet (100 Megabits per second) and Fiber 500 500 kilobit per second services, at flat rates. In its new markets, the company is offering a free month of service to customers who try Cogent’s offerings, Schaeffer said.

“We did that recently in Stockholm and Copenhagen and we now have a number of customers in each of those cities,” he said.

As part of the expansion, Cogent also has acquired an additional 10 Gigabits of transAtlantic fiber-optic network capacity, bringing its total undersea
capacity to 50 Gigabits across 5 diverse routes. The company serves 95 markets in 14 countries.

Schaeffer said Cogent continues to be judicious about adding fiber connections to buildings within cities it serves, trying to balance customer demand with the need to justify the cost of adding a new connection.

“In existing markets, if we just have one tenant in a building, the time frame to add that building can be up to a year and we can’t expect the demand to wait for a year,” he said. “We do that in a speculative basis. In the case of the new cities, we start with a limited footprint. We will get one or two PoPs [points of presence] on quickly. Then we wait for specific location -- a specific customer that we can build to.”

User demand has continued to grow, even through the early 2000’s, Schaeffer said, and with consolidation and financial fall-out, the number of service providers had dwindled, and pricing has stabilized.

“We haven’t changed our pricing in our entire history,” he added. Cogent has always offered 100 Mb/s dedicated Internet access for $1000 a month.