BellSouth and Sprint comprise a clear top tier of wholesale data service providers, according to the Yankee Group’s 2005 survey of 140 service providers, including incumbent carriers, long-distance companies, cable MSOs, ISPs, resellers and system integrators.

The survey also showed a distinctive shift in the wholesale market, as “the buying criteria of this market is starting to more reasonable the enterprise market,” said John Romagnoli, senior analyst, Wholesale Communications Strategies, with Yankee and author of “Sprint, BellSouth Lead Wholesale Providers in Overall Quality,” the report that accompanies the “Yankee Group 2005 US Wholesale Data Services Survey.”

“There is a major shift,” he said, “Service providers are looking to solve specific problems. This technology has been around so long, and is so standardized and so interoperable that network quality has become the major issue. Wholesale buyers are looking to solve specific problems. They are building solutions for their enterprise customers that are more complex and that have to work. Quality and network performance have become the most important criteria.. The wholesale market is working more like the business market – it’s not at all commodity anymore.”

Overall, the entire industry is doing a good job, but the user survey showed three clear tiers of performance. On top is BellSouth and Sprint, and in the middle is a tight cluster of companies including AT&T, Global Crossing, Level 3, MCI, SBC, Verizon and Wiltel. MCI actually earned top marks for network quality in the survey.

The third tier includes Broadwing, Qwest and XO Communications, Romagnoli said. The survey covers the period before the merger of AT&T with SBC, Wiltel with Level 3 and MCI with Verizon, and before XO split into two separate entities, one focused on broadband wireless.

“They are not gravely different but the difference is significant enough,” he said. “Qwest has to decide if it wants to be tiered with the XO’s and the Broadwings. And XO and Broadwing are now trying to sell on expertise, by behind ahead of everyone else in the convergence game. What the market seems to be telling them is that that’s nice, but what’s needed is high network quality and high network performance, and not a one-size-fits-all platform.”

The group is the middle tier is well-poised to rise to the top, Romagnoli added.

He gives BellSouth particular credit for its focus on customer needs within its regional footprint.

“They have developed a relationship with their customers that’s hard to rival,” he said. “BellSouth is extremely driven by quality. They have a very loyal customer base.”

Also interesting was the fact that the open-ended survey showed less emphasis on Service Level Agreements than in the past.

“It’s been replaced by network performance,” Romagnoli said. Wholesale service providers are giving their customers to tools to constantly monitor that performance, he added, and SLAs have largely become “just paper – everyone can do that.”