benchmark-it
performance
This new 302-page report profiles and compares 20 key alternative providers of trans-border telecoms services, with a focus on Western Europe.
The report includes the following: • Profiles of 20 carriers
• Verdict
• Summary (strategy and recent activities) • Geographic reach
• Portfolio
• Management (revenues and reputation) Who should buy the report?
• Operators selling telecoms services in Western Europe • Companies investing in or supplying the above
• Companies buying services from the service providers covered Key benefits:
• Source of key information on 20 service providers • Independent market analysis and comparisons
• Gives customers time to concentrate on analysing implications and to formulate action plans
Updated since last report:
• 20 updated player profiles
• Analysis of player positioning and differentiation strategies • Market analysis and updated conclusions from previous report Key conclusions:
• The market remains competitive but is more stable than for some time • Service providers have selectively invested in new products and
network expansion, notably to emerging markets in Central/Eastern Europe, China and India
• Further consolidation amongst service providers is to be anticipated Pricing is £995 for a corporate licence (intranet licence).
benchmark-it
performance
Alternative Trans-Border
Telecoms Service Providers
In Western Europe
April 2006
TABLE OF CONTENTS
Executive Summary
Page
3
Market Analysis
Page
4
Check-list From The Last Report
Page 6
Benchmarked Suppliers
Page 9
Supplier Profiles:
AT&T
Page
13
BT Global Services
Page
25
BT Infonet
Page
51
Cable & Wireless
Page
72
Cogent Communications
Page
85
COLT
Page
93
Equant
Page
118
ETT
Page
142
Global Crossing
Page
149
Interoute
Page
168
KPN International
Page
182
Level 3
Page
193
NTT Com
Page
209
SAVVIS
Page
218
Sprint
Page
231
T-Systems
Page
241
Vanco
Page
256
Verizon Business
Page
265
Viatel
Page
284
Executive Summary
The market for the provision of trans-border telecoms to businesses in Western Europe remains highly competitive, which is why all but the smallest of service providers are struggling to register revenue growth above single digits, even though traffic continues steadily to grow.
Within that context, service providers have managed, however, to launch new products (Ethernet and VoIP in particular over recent months) and have also increasingly invested selectively in expanding their footprint, most notably into the emerging markets in Central and Eastern Europe, and into growing Asia Pacific markets such as China and India.
The acquisition of AT&T and MCI by, respectively, SBC and Verizon has served to strengthen their relative positions in the market as they not only benefit from a more stable financial background, but are also finding a new impetus as a result of these deals – this is largely helped by the fact that the acquirers had little or no international presence. By contrast, BT Global Services is gradually absorbing BT Infonet so as not to disrupt customers’ existing service levels.
Across the board, the international arms of incumbents are being combined with domestic divisions that serve the largest national customers, giving the likes of BT, France Telecom, KPN and Deutsche Telekom an opportunity to strip out duplication, avoid potential internal political wrangles and to develop a single portfolio based on a unified network. The associated economies of scale also help them to compete with their smaller and nimbler rivals, as well as being able to position themselves further up the value chain by offering more consultative and managed services (or ‘solutions’ as they insist on calling them).
The activity in the European market for consolidation has slowed somewhat in recent months, with the only significant deals being that by BT to acquire Fiat’s Atlanet arm in Italy and T-Systems’ acquisition of Volkswagen’s gedas IT subsidiary. The market remains, however, oversupplied and further consolidation is to be expected – the likely scenario is for there to be up to half a dozen truly global players, a few Europe-only players, and a number of niche players focused either on a particular part of the value chain or specialising in a particular service or vertical sector.
Virtual service providers continue to make waves and progress – their ‘infrastructure-lite’ business models mean they can focus on customer service. However, their ‘infrastructure-heavy’ competitors keep dismissing them, despite their rapid revenue growth – only time will tell whether a telecoms service provider can join the big league with few physical assets. Indeed, if virtual operators continue their growth paths they might well become acquisition targets themselves as their lack of assets tends to make them potentially cheap when compared with traditional service providers.
Portfolio: Data:
ATM/Frame Relay Services:
• Layer 2 service supporting any layer 3 protocols such as IP; • Class of service supports voice, video and delay-sensitive data; • Hub-and-spoke and partially meshed networks;
• Low-cost uncontended secure access available using technologies such as DSL;
• Each PVC (Permanent Virtual Circuit) is managed with an agreed QoS to make it suitable for a particular type of traffic:
o CBR (Constant Bit Rate) for real-time applications;
o VBR-nrt (Variable Bit Rate-non real-time) for burtsy traffic that is delay-tolerant;
o UBR+ (Unspecified Bit Rate) for non delay-sensitive traffic;
• Available over COLT’s European network, both nationally and internationally, plus to COLT’s node in New York. COLT also has partnerships for delivery to other locations;
• Web-based reporting tools offering on-line utilisation statistics, network performance reports, problem identification and tracking, information on latency and cell discards;
• Available at speeds from 64kbps to 155Mbps; • Bursting supported:
o Frame Relay: 2:1;
o ATM: 2:1, 3:1, 5:1 and 10:1; • SLA:
o On-net, off-net Tier 1: 100%; o Off-net Tier 2: 99.9%; • Also available in wholesale version. Carrier Ring:
• Carrier ring access circuits give voice carriers the ability rapidly to establish interconnections to multiple carriers through a single access circuit;
• Available within and between: o London;
o Amsterdam; o Brussels; o Frankfurt; o Paris;
• Connections can be established within 24 hours; • Access circuits from 4x2Mbps to 622Mbps;
• SLA covering service delivery, availability (99.95%) and total time to repair (4 hours);
SAMPLE PAGE
Geographic Reach:
Western Europe:
AT&T lists the following European countries where it has a PoP (Points of Presence):
Austria Belgium Bulgaria Croatia Cyprus
Czech Republic
Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Netherlands Norway
Poland Portugal Romania Russia Slovak
Republic
Slovenia Spain Sweden Switzerland Turkey
UK Ukraine Other Regions:
USA/Canada Ubiquitous. Eastern Europe See above
Middle East/Africa
India, Israel, Pakistan, Qatar, South Africa.
Asia Pacific Australia, China, Hong Kong, Indonesia, Japan, Malaysia, New Zealand, Philippines, Singapore, South Korea, Taiwan, Thailand. Latin America Argentina, Brazil, Chile, Columbia, Ecuador, Mexico,
Netherlands Antilles, Panama, Peru, Puerto Rico, Venezuela. Globally, AT&T’s MPLS network offers dedicated access from more than 1,550 service nodes in 127 countries, with remote access offering extended reach to 149 countries.
In June 2005 AT&T announced that it was deploying new access nodes across all its global regions, including China, Croatia, Cyprus, Ecuador, India, Malaysia, Qatar, Panama and the United Arab Emirates.
To increase in-country coverage, AT&T also established network interconnections with China Netcom and China Telecom. Further interconnections are being set up in Brazil, Canada, France, Germany, Ireland and the UK. Further interconnections are planned for later in 2005.
In February 2006, AT&T announced details of its latest expansion plans for its global network. Highlights include:
• Extended dedicated MPLS-based access capabilities to give service nodes in 127 countries;
Management
Top-level financials for recent financial years are shown in the table below:
£ millions 2005 2004 2003
Turnover
Continuing operations 3,023 3,130 3,377
Discontinued operations 199 541 1,014
Group turnover 3,222 3,671 4,391
Operating profit (loss) before exceptionals
331 240 (452)
The table below shows how Cable & Wireless’ group turnover has broken down by origin in recent years:
£ millions 2005 2004 2003 UK 1,602 1,661 1,684 CWAO (USA) 16 11 - Europe 186 262 304 Asia 39 32 79 Bulldog 11 - - National telcos 1,191 1,187 1,340 Inter-segment turnover (22) (23) (30) Continuing operations 3,023 3,130 3,377 Discontinued operations 199 541 1,014 Group turnover 3,222 3,671 4,391
Turnover in Europe fell by £76 million to £186 million in the 2004/05 financial year, a decline of 29%. Turnover from Enterprise customers fell 45% to £22 million, reflecting the loss of a major contract and the full-year impact of disposals of domestic operations in Sweden, Belgium, the Netherlands, Italy, Switzerland, France and Germany. Cable & Wireless has also since disposed of its national operations in Spain.
Turnover in Europe for the first half of the 2005/06 financial year saw growth overall to £98 million (£91 million for the same period a year earlier), however revenues for the period from retail customers fell to £9 million from £13 million.
European operations broke even at the level of total operating profit before exceptional items in H1 2005/06, compared with an operating loss before exceptional items of £6 million in H2 2004/05. Capital expenditure “was negligible, reflecting the reduced scale of operations in Europe.”
