Optimum Lightpath Takes Network-Hosted VoIP Stage with All-Inclusive Converged Bundles

| Jan 22, 2009 | Business Network Services - U.S. | Competitive Intelligence Report

| Analyst: Brian Washburn

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

Event Summary

January 20, 2008 – Optimum Lightpath has introduced Lightpath Hosted Voice, business-class hosted voice and Internet packages delivered to customers over a single connection. The carrier handles installation, maintenance and management of all equipment, software and services, including an online customer portal. The company supplies Internet and voice access with advanced calling features, CPE including telephones, buckets of calling minutes, customer service and technical support, all under a single monthly charge that aims to reduce capital investments and save costs relative to similar services from traditional telecommunications providers.

Analytical Summary

• Current Perspective: Positive on Optimum Lightpath’s launch of turnkey network-hosted VoIP/Internet bundles, because the provider has created a sophisticated voice and data solution that includes everything from service provisioning and equipment, to installation and ongoing maintenance. The carrier's Lightpath Hosted Voice service is best targeted to enterprises that want to tap the benefits of VoIP, while outsourcing all the equipment and services risks of migration. The tough economy should make Optimum Lightpath's marketing message – outsource service complexities while paying low prices relative to what telco competitors charge – very appealing.

• Vendor Importance: High to Optimum Lightpath, because the carrier needed to round out its business voice portfolio by adding a network-hosted VoIP service. To date, the carrier already offered conventional TDM voice/Internet bundles, IP trunking and managed IP-PBX services, so the carrier now can supply prospective customers with a portfolio of major VoIP options.

• Market Impact: High on voice/data competitors in the greater New York City area, because Optimum Lightpath's new hosted VoIP offer goes beyond most of the multi-line voice/data business services debuted by cable competitors in other parts of the country. The carrier's Lightpath Hosted Voice aims to provide a turnkey managed service with all elements handled by the cable competitor. Optimum Lightpath aims specifically to offer higher data speeds and overall low price points relative to competitors that deliver their services across traditional telecommunications infrastructure.

Current Perspective

Competitive Positives and Concerns

Recommeneded Vendor Actions

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Recommended Competitor Actions

• Verizon Telecom and Verizon Business (and AT&T in Connecticut) should tout the regional/national comprehensive footprint of services, and these carriers' great spread of services and facilities-owned international reach. Even if Optimum Lightpath might be able to build a more attractive offer inside the greater New York City metro, these competitors can bid on an overall package deal that they can claim is more comprehensive and compelling than what Optimum Lightpath's point solutions can offer.

• Verizon Telecom, AT&T and CLECs can point out that Optimum Lightpath depends on a foundation of fiber and Ethernet for its services, and they can contrast this with their T-carrier services, which are ubiquitously available throughout the greater New York City tri-state area, and which (unlike Cablevision's HFC infrastructure) offer service guarantees for availability and restoration times.

• Verizon and AT&T can build comprehensive services at the high end, but need to review their services options at the low-end: Verizon needs a multi-line business voice solution for FiOS for Business. AT&T recognizes, and is addressing the need for multi-line business voice for U-Verse service. AT&T and Verizon may also want to review their lower-end fully packaged managed services offers (AT&T Business in a Box, Verizon IP Flex T1) to see whether SMBs are ready for fully network-hosted VoIP variants.

• RCN needs to tout its Talkware service, which the carrier offers in its markets including the New York City metro area. The carrier can play off its ability to offer Talkware as a cohesive service across its fiber and HFC networks, serving customers with just three or four lines, or customers with up to hundreds of lines per location – all while offering substantial cost savings and while providing the customer with strong personalized attention.

Recommended End User / Customer Actions

• SMBs and larger businesses in the greater New York City region should review regularly which fiber options (if any) they have to their business locations. All T-carrier transport may look the same, but services will tend to be more dependable if they are delivered over a fiber ring rather than a copper loop, and many fiber-based providers are only too happy to sell even small amounts of additional capacity once they have run fiber to a building.

• Companies considering Lightpath Hosted Voice can put the company's claim of complete service at low prices to the test. For those businesses that decide to shop around for available options, the buyer needs to pay very close attention and specify the components that are, and those that are not included in the price of the service – from customer portals, to calling features and specifically hunt groups and auto-attendant, to installation and supply of CPE and other equipment, to maintenance and 8x5 or 24x7 support.

• Businesses with only some of their locations served by Optimum Lightpath, or only some of their service needs covered by the carrier's optical/Ethernet-centric focus, will need to make the decision whether to split the contract among two or more service providers, or whether to choose a service provider that reaches all business locations and/or addresses all their service needs.

• Businesses intrigued by Optimum Lightpath's offer may also want to explore RCN's Talkware business voice service. However, Optimum Lightpath parent Cablevision appears to be solid financially, while RCN has weathered a bankruptcy and is a much smaller company in terms of revenues.

CLIENTS ONLY

Current Perspective

Competitive Positives and Concerns

Recommeneded Vendor Actions

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