Cable & Wireless’ International EPL Launch Advances the Carrier’s Global Data Network Service Strategy

| Aug 14, 2009 | Business Telecom Services - Europe | Competitive Intelligence Report

| Analyst: Joel Stradling

Current Perspective: Positive
Vendor Importance: High
Market Impact: Moderate

Event Summary

August 12, 2009 -- Cable & Wireless (C&W) launched its International Ethernet Private Line (IEPL) service in 12 countries. IEPL is an Ethernet-over-SDH service that supports up to 1 Gbps over C&W’s ‘Core Director Network’. Ethernet Wireline and Ethernet VPN products are to follow in the coming months. C&W has been investing considerably in its Multi-Service Platform (MSP) and in beefing up its abilities in Asia for delivering stronger managed IP services.

Analytical Summary

• Current Perspective: Positive on the launch of IEPL by C&W, because the service provider is strengthening its international data network service portfolio with a long-haul point-to-point L2 Ethernet pillar, with more enhancements in its roadmap to launch Ethernet VPN and Ethernet Wireline in the near-term. The move brings to market an appealing message that should resonate well with existing customers and new prospects that are eager to take advantage of the benefits inherent in Ethernet-over-SDH, namely flexibility and convenience, low-latency, self-healing resiliency, and an attractive cost-base.

• Vendor Importance: High to C&W, because the carrier has been investing significantly is its global MSP rollout based on Alcatel-Lucent 7750 and a Cisco IP core, and needs to deliver new services to justify this CAPEX. Moreover the company is being challenged to respond to aggressive momentum on the part of several competitors, including for example Tata Communications, Global Crossing, and KPN International, in the area of Ethernet services, including Ethernet VPNs.

• Market Impact: Moderate on the global Ethernet services market, because C&W is joining an ever-growing list of global Ethernet service providers. However, the carrier has a very strong UK offering and has been expanding its MSP rollout into Europe, Asia and the U.S. (see Cable & Wireless Puts NGN in Play in Europe, July 2, 2009), and the combination of knowledge gained, existing entrenchment, and newly deployed next-generation infrastructure applies new pressure in the increasingly crowded marketplace.

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Current Perspective

Competitive Positives and Concerns

Recommended Vendor Actions

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Recommended Competitor Actions

• Several Tier 1 global telecom operators that already sell long-haul point-to-point Ethernet circuits, including Tata Communications and Verizon Business, need to point out that C&W is catching up and is not offering an overly large number of on-net destinations; or detailed E-NNI plans to augment reach.

• C&W is just one among many carriers who are viewing international E-Line and E-LAN services as a strong area of focus and several operators including C&W and Global Crossing are talking about near-term launches of Ethernet VPN and VPWS. Therefore rivals need to reassess where they are with their Ethernet strategies and move to plug gaps or introduce enhancements to existing products.

• Typical Ethernet service range improvements might include negotiating new E-NNIs for extended reach, investments designed to expand the MSP and upgrade bandwidths, improving online monitoring tools, and covering all bases with point-to-point, point-to-multipoint, and any-to-any offerings. There are also possible sales advantages to be had by offering Ethernet-over-MPLS, DWDM wavelengths, or Ethernet-over-SDH, because certain clients within a certain profile might prefer one or the other according to a unique set of requirements.

• Established international providers need to seek to undermine C&W’s efforts to ramp up momentum citing a lack of progress and a low profile over the past several years. For example customers can be asked when was the last time C&W was included in an international data WAN bid and announced any significant wins.

• Operators that already offer global Ethernet VPN services, including VPLS-based Ethernet, should point out that C&W still has some way to go before it catches up. Thus KPN International, Tata Communications, Tinet, and Reliance Globalcom, can point to unmatched capabilities as of today, and therefore unique selling points against C&W.

• COLT can question C&W E-NNI policy and its ability to offer consistent SLAs over partner portions of the network. COLT can follow-up by presenting its ‘COLT Grade’ concept and successful implementation of over 100 E-NNIs with third parties to give extended off-net reach. COLT recently (February 2009) communicated its intentions to extend its Ethernet portfolio to new foreign destinations in Central and Eastern Europe, Johannesburg, Dubai and several Asia-Pac countries, and the carrier should make good on such promises to counter C&W stronger international network reach.

Recommended End User / Customer Actions

• Business customers seeking low-latency Layer 2 point-to-point Ethernet circuits between Europe, Asia – including India, and the U.S. should certainly consider C&W as a potential supplier. The carrier has a proven and cutting-edge UK-based Ethernet range, and has a strong reputation for quality and good customer service. The carrier has also been making significant invests in rolling out a multi-service platform, which bodes well for a long-term supplier-client relationship and on-going improvements in reach and feature-set.

• C&W’s self-healing Ethernet-over-SDH IEPL offering has several positive attributes, such as high port speeds up to 1 Gbps, scalable bandwidth, and a realistic cost-base. Customers should request a product data sheet displaying standard SLA metrics, pricing structure, whether port speed bursts and 95% method are options, and whether IP VPN/Ethernet inter-working and integration are possible.

• Customers need to ask C&W for greater clarity concerning its international Ethernet rollout, for example which cities are services-enabled as of today, which new destinations will be added and when, and what are the concrete dates for Ethernet VPN and Wireline launches?

• There are now several international provides of Carrier Ethernet service proposals, and customers are advised to shop around. In many cases unique geographical needs will help to identify the most suitable partner.

• The number of carriers offering long-haul international Ethernet VPLS on any grand scale, in other words for example interconnecting more than a dozen countries on a full Ethernet mesh, remains limited. Current global propositions are available from KPN International, Tata Communications, Reliance Globalcom and Tinet. However many service providers have Ethernet VPLS on the roadmap, including for example, Global Crossing and Orange Business Services.

CLIENTS ONLY

Current Perspective

Competitive Positives and Concerns

Recommended Vendor Actions

| Client access - Full report in Business Telecom Services - Europe | More information

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