benchmark-it performance

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benchmark-it

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This comprehensive 705 page report profiles, compares and assesses 37 key providers of international business networking and related services.

The report includes the following:  Profiles of 37 carriers:

 Verdict on strategy and performance  Geographical coverage and reach

 Product/service portfolio details and availability

 Target customer types (segments/verticals) and market positioning  Revenue, organizational and management information

Who should buy the report?

 Providers of international networking and related B2B services  Suppliers and advisors to the IB2B market

 Customers of the IB2B market Key benefits:

 Source of key information on 37 service providers  Independent market analysis and comparisons

 Enables customers to focus on implications and formulate action plans Key conclusions:

 The continued interconnection of personal and professional lives is driving the globalization of the world’s economy and population

 This, in turn, is being driven by global ICT products and services

 With the North American and Western markets saturated and offering fewer opportunities, growth is being targeted in Asia Pacific, Latin America and, to a lesser extent, the Middle East and Africa

 The established ‘big four’ players (AT&T, BT, Orange and Verizon) are seeing more competition from (and within) these ‘emerging’ markets  Global mobile players are increasingly targeting the MNC segment,

leveraging their international mobile footprints and relationships

 The convergence of IT and communications is seeing overlaps in terms of portfolios (notably in the ‘cloud’), which will drive inter-sector partnerships and consolidation

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benchmark-it

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International

Business-to-Business Services

December 2011

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Executive Summary

With both personal and professional lives becoming more interconnected, the world’s economy and population continue to globalize. A key enabler of this trend in globalization is ICT services, which have become the lifeblood of modern commerce. Until recently, much of the focus for global service providers was on the deregulated and established markets of North America and Western Europe, but, with the growth of manufacturing and service industries in the Asia Pacific and Latin American regions, that focus is shifting. This trend has been exacerbated by the impact of the global recession on Western economies, with growth being driven by emerging markets – most obviously by China and India.

The impact of this on the market for international ICT service provision has been twofold. First, the established players are increasingly moving to be able to serve these ‘emerging’ markets – responding both to their own need to find new revenue opportunities and to customers’ growing networking requirements in these countries. Second, a number of providers based in these regions have moved to try to address the global market themselves.

Despite the undoubted progress of these relatively new entrants to the global market, the ‘big four’ players that have dominated the MNC segment (AT&T, BT Global Services, Orange Business Services and Verizon Business) have maintained their market leadership.

Another source of emerging competition has come from global mobile players who are increasingly looking to leverage the importance of mobile services and their global mobile assets to win MNC custom in the form of managed services.

At the same time, the boundaries between the IT and communications sectors continue to blur as the market increasingly becomes one that is focused on the secure storage and delivery of applications (be they voice, data or multimedia), rather than on the means of their delivery. This has seen global IT and communications providers’ portfolios starting to overlap. Where historically players from each sector would often collaborate, they are increasingly competing with one another. The implications for the market are potentially hugely significant and could lead to cross-sector consolidation that would have a global impact.

In the meantime, whilst dealing with ever more technological complexity and challenges such as security, it is crucial for service providers to deliver services to customers’ end users in a consistent, secure and user-friendly manner – a challenge that is as much cultural and organizational as it is technical.

Despite all the challenges highlighted above, the international business-to-business communications market continues to offer great opportunities as ICT underpins so much of the global economy, even in the uncertain state in which it currently finds itself.

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SAMPLE PAGE Name: BT Global Services

Customer Focus: MNCs, Carriers

Positioning: Global networking and IT services provider

Presence

North America Latin America Europe MEA Asia Pacific Key cities Growing Strong Some Growing

Portfolio

Fixed Networking Mobile/Mobility IT/Cloud Services Yes Yes (access) Yes

Verdict: BT Global Services continues to improve following its period of restructuring, becoming a leaner organization and bringing greater coherence to its formerly rambling portfolio of products and services. Commitment to growth in Asia Pacific and Latin America is good news, and it is finally catching up with others in terms of Ethernet services, although it still lags behind in its cloud proposition. Overall, however, BT Global Services appears to have re-established forward momentum and competes at the top level of the MNC segment.

Name: Cable & Wireless Worldwide

Customer Focus: Corporates, Wholesale

Positioning: Alternative international services provider

Presence

North America Latin America Europe MEA Asia Pacific Key cities N/A Some Some Some

Portfolio

Fixed Networking Mobile/Mobility IT/Cloud Services

Yes No Some

Verdict: Cable & Wireless Worldwide essentially consists of two operations – a major competitor for enterprise customers to BT in the UK, and a niche player at a global level. With a revolving door into the CEO’s office, Cable & Wireless Worldwide’s future will be as an eventual acquisition (when markets regain enough confidence), with the only question being whether it will be sold as two parts or if a buyer would want both the UK business and international presence.

Name: Cogent Communications

Customer Focus: Bandwidth-hungry corporates, Wholesale Positioning: Internet access and data transport provider

Presence

North America Latin America Europe MEA Asia Pacific Key cities Some Key cities N/A N/A

Portfolio

Fixed Networking Mobile/Mobility IT/Cloud Services

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SAMPLE PAGE

Global Crossing

Verdict: Global Crossing has just been taken over by Level 3, having established a strong niche position as an independent service provider. In the short term, there will inevitably be disruption caused by the integrating of networks, organisations, processes and systems – disruption that competitors will look to exploit. Once the integration process has been completed, however, the new company will have a greater presence in North America, which will balance well with legacy Global Crossing’s other assets in Latin America and Europe. The new company will not be a direct competitor to the leading service providers in the enterprise segment, but will be a more significant player, especially if it can expand in the Asia Pacific region. It will also be a significant player in the wholesale segment and will benefit from its parents’ positioning as leading next-generation, all-IP carriers.

Summary

On October 4th 2011, Level 3 and Global Crossing joined forces under the brand name Level 3. Until the two companies have been fully integrated, this profile includes information about Global Crossing prior to the completion of the takeover of the company by Level 3.

The combined entity initially describes itself as follows: “As a leading global provider of telecommunications services, Level 3 delivers a comprehensive portfolio of converged voice, video, data and managed services to enterprise, content, wholesale and government customers.

The new integrated network unites Level 3’s broad, deep U.S. and European footprint with Global Crossing’s extensive international network in Europe, Latin America and Asia. The new network reaches more than 450 core network markets in more than 45 countries.

The integration of Level 3 and Global Crossing enables an expanded set of services and solutions for our customers and prospects:

 Data - increased flexibility, control and application optimization with increased data centre connectivity and extensive VPN capabilities worldwide;  Voice - best-in-class pairings, combining the Level 3 SIP Trunking offering

and a seamless migration to unified communications with Global Crossing’s audio-, Web- and video-conferencing capabilities;

 Video - new opportunities to enable global content delivery leveraging an expanded team streaming the world’s largest media events;

 Managed Services - support that encompasses 24x7 availability with the cultural sensitivity and language diversity required to support multinational companies;

 Access - more endpoints in more markets via one of the world’s largest end-to-end IP global networks.

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SAMPLE PAGE

Geographic Reach:

Colt operates a 21-country, 35,000 kilometre network that includes metropolitan area networks in 39 major European cities, with direct fibre connections into 18,000 buildings and 19 Colt data centres.

The IP network backbone uses Cisco GSR routers and runs at speeds up to 622Mbps (STM-4). Colt’s owned fibre can offer up to STM-64 speeds on a single circuit with various granularities.

All backbone nodes are connected to at least two other nodes by diversely routed circuits, providing a fully resilient network. The backbone network also extends to Internet exchange points in every country where Colt has a presence and extends to the USA.

The Colt network is available for an average 99.999% of time per annum.

Colt has been introducing EFM (Ethernet in the First Mile) technology. This enables businesses to access the Colt network at speeds of up to 20Mbps over copper and can be used with IP VPN, Internet Access and Ethernet services. Colt claims that, through partnerships with more than 70 European partners, it can extend the reach of its Ethernet product portfolio beyond the reach of its own fibre network.

Colt announced in July 2008 that it had chosen Nokia Siemens Networks to provide technology for its MSP (Multi-Service Platform) layer and Sonus Networks for an advanced softswitch deployment as the foundation of its next-generation network portfolio. The Colt MSP reaches 39 cities across Europe, enabling the delivery of its metro Ethernet services, national and international Ethernet, IP VPN and Internet Access services. The platform offers customers a single box that is capable of delivering up to 16 services at speeds of up to 1Gbps.

In June 2010, Colt extended its network into Central and Eastern Europe, linking Warsaw, Prague, Budapest, Bucharest and Bratislava.

In June 2011, Colt extended its long-distance fibre network (by 1,600 kilometres) into additional cities in Italy, including Bologna, Genoa and Parma.

Colt’s city fibre networks (and data centres) are in the following locations (with other Colt-connected cities in italics):

 Austria: o Graz; o Innsbruck; o Klagenfurt; o Linz; o Salzburg; o St Polten; o Vienna;

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SAMPLE PAGE

Geographic Reach:

AboveNet has more than 2,600 on-net buildings (including over 400 data centres) and more than 2.3 million fibre miles, including 12,000 route miles of long-haul and trans-oceanic network (to Europe and Japan). The company has over 120 PoPs, including over 20 Type 1 PoPs (typically larger presences located in major carrier hotels complete with network co-location and interconnectivity services).

AboveNet is in the process of upgrading its U.S. long-haul network to 40Gbps (up from 10Gbps).

The chart below illustrates the AboveNet network:

The markets it serves in the USA are:  New York City region;  New Jersey metro area;  Boston;

 Chicago;  Baltimore;  Philadelphia;  Washington DC;

 Northern Virginia metro area;  Atlanta;

 Denver;  Miami;

 San Francisco;  San Jose metro area;  Seattle;

 Portland;  Phoenix;  Los Angeles;

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SAMPLE PAGE

The table below illustrates the availability of AT&T’s Enhanced VPN Service (and associated services/access methods) by country:

Country VoIP On-Net VoIP Off-Net AT&T-provided ISDN DSL Ethernet Anguilla Y N N N N Antigua and Barbuda Y N N N N Argentina Y Y ICB N Y Aruba Y N N N N Australia Y Y N Y Y Austria Y Y Y N Y Azerbaijan N N N N N Bahamas Y N N N N Barbados Y N N N N Belarus N N N N N Belgium Y Y Y Y Y Bermuda Y N N N N Brazil Y Y ICB N Y British Virgin Islands Y N N N N Bulgaria Y Y Y N Y Canada Y Y N N Y Cayman Islands Y N N N N Chile Y Y ICB N N China Y N N N Y

Colombia ICB N ICB N N

Costa Rica Y N N N N Croatia Y N Y N N Curacao Y Y N N N Cyprus Y N Y N N Czech Republic Y Y Y Y Y Denmark Y Y Y Y Y Dominica N N N N Dominican Republic Y N ICB N N Ecuador Y N ICB N N El Salvador Y N ICB N N Estonia Y Y Y N Y Finland Y Y Y N Y France Y Y Y Y Y Georgia N N N N N

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SAMPLE PAGE

Portfolio:

Enterprise:

 Internet Services:

o Access speeds from 64kbps up to 10Gbps;

o Flexible CDRs (Committed Data Rates), full-port and sub-port CDRs; o ‘Wires-only’ or fully managed CPE;

o Network Address Translation (NAT); o CPE to PE routing protocols:

 BGP-4;

 Static;

o Routed protocol support:

 IPv4;

 IPv6;

o DSL interconnects with incumbents in:

 Austria;  Belgium;  France;  Germany;  Italy;  Netherlands;  Spain;  Switzerland;  UK; o Options include:  Resilient configuration;

 DNS registration and resolution;

 Mail back-up;

 Mail relay;

 Static IP address allocation; o Range of billing options:

 Per Mbps 95th Percentile (top 5% peak usage in 5 minute intervals over the month is ignored);

 Per 95th Percentile Committed Level + Burst (customer commits to a level of bandwidth and is charged at the 95th percentile for excess usage);

 Flat rate;

 Volume usage;

 Customers with multiple sites can choose to aggregate their usage for billing;

o 24x7x365 customer support; o Credit-backed SLAs;

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SAMPLE PAGE

Management

Revenue:

BT Global Services generated revenues of £8.047 billion (€9.5 billion) in its 2010/11 financial year (ended 31st March 2011), with EBITDA of £593 million (FY2009/10: £8.513 billion and £457 million respectively).

The chart below illustrates BT Global Services’ revenues by sector for the 2010/11 financial year.

BT Global Services generates around 40% of the company’s external revenues and 10% of its adjusted EBITDA.

BT Global Services’ financial performance and positioning by customer segment have been described as follows:

 MNC:

o Leading provider of networked IT services to multinational customers; o Around 400 major customers;

o Long-term global contracts: 3-5 years; o 3 key sectors:

 Financial services;

 Pharmaceuticals;

 Consumer products;

o £2.8 billion revenue, high growth potential; o About £0.3 billion EBITDA contribution: o 2009/10 addressable market: £100 billion; o 3-year CAGR 6.5%;

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Management

Revenue:

Tata Communications generated operating revenues of Rs113.84 billion ($2.56 billion/€1.67 billion) in 2011, up 8% from 2010’s Rs106.08 billion.

The table below illustrates revenue breakdown by region over the past two financial years (year ended 31st March):

Rs millions except where stated 2010 2011 2011

India 28,847 30,813 $692m

USA 19,159 17,893 $402m

UK 11,637 13,167 $296m

Canada 4,274 5,849 $131m

Rest of the world 42,163 46,118 $1,035m

Total 106,080 113,480 $2,556

The table below illustrates revenue breakdown by segment over the past two financial years (year ended 31st March):

Rs millions except where stated 2010 2011 2010

Global Voice Solutions (GVS) 61,436 65,516 $1,471m

Global Data & Managed Services (GDMS) 42,413 46,604 $1,046m

Other 2,231 1,720 $39m

Total 106,080 113,840 $2,556m

Revenues from Managed Services (hosting, security and application services) grew by 32% in fiscal 2011 over 2010.

Management Team:

Tata Communications’ Managing Director and CEO is Vinod Kumar. Tata’s President of Sales & Strategy for Global Data and Mobility is Laurie Bowen.

The company says it has employees in 80 cities across more than 40 countries. It has about 7,600 employees in total, of whom about 20% are located outside of India. Tata Communications has a dedicated Global Media and Entertainment Solutions unit that is focused on the media sector.

Reputation:

Tata Communications’ customer base includes more than 1,600 global carriers and service providers, 785 mobile operators, over 50,000 business customers and 190,000 broadband and Internet subscribers. The company claims to have an 11% market share of the wholesale voice market, making it a leading player in this segment.

benchmark-it performance

benchmark-it

performance

benchmark-it

performance

International

Business-to-Business Services

December 2011

TABLE OF CONTENTS

Executive Summary

Global Crossing