Reliance Globalcom Boasts VPLS-Based Ethernet Services in 17 Countries Including Asia-Pacific, the Middle East, Europe and North America

| May 15, 2009 | Telecom Services - Asia | Competitive Intelligence Report

| Analyst: Brian Washburn

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

Event Summary

May 13, 2009 -- Reliance Globalcom, an international provider of managed network communication services for multinational enterprises, carriers and consumers, announced that it has extended its Enterprise Global Ethernet services to 17 countries, expanding the reach of its wide area point-to-point and fully-meshed offerings. Reliance Globalcom’s fully-meshed, fully-managed Ethernet network serves China, France, Germany, India, Japan, Singapore, Spain, the UAE, the U.K., the U.S. and several additional enterprise destinations worldwide.

Analytical Summary

• Current Perspective: Slightly positive on the extension of Reliance Globalcom’s national and international Ethernet VPLS service to 17 countries around the world, because by combining the assets of the former Yipes, Flag Telecom and Vanco, the multinational carrier is emerging as a major provider of international VPLS. While the largest number of cities served will be in the U.S., a legacy of the acquisition of Yipes by Reliance in 2007 (see “Yipes Becomes Enterprise Business Unit of Reliance Globalcom, with New International Services Already in the Works, Business Network Services,” February 28, 2008), most of the recent emphasis has been on building up the international VPLS network, although the company will ultimately lag AT&T, which is planning to extend VPLS to more than 30 countries during 2009.

• Vendor Importance: High to the enterprise side of Reliance Globalcom, because Ethernet-VPLS service is central to its strategy of becoming a top tier provider of international communications services to large multinational corporations doing business in the Middle East and South Asia. Unlike MPLS-based IP VPN services, VPLS is still an emerging service for which no company has a lock on the market at this early stage.

• Market Impact: Moderate on the pan-Asian Ethernet services market, because Reliance Globalcom’s VPLS-based global Ethernet services are available in key international destinations for MNCs, including 30 cities in the U.S. Reliance also provides fully managed option supported by real-time monitoring and backed by competitive SLAs. However, major Asia-based carriers including NTT, SingTel, Tata Communications and Telstra International have competing Ethernet offers that are available in many Asia-Pacific destinations as well as key cities in Europe and the U.S. Outside of India, Reliance Globalcom needs to expand its network and staffing presence in Asia Pacific to pose a greater threat to competitors in the region.

Recommended Competitor Actions

• As more carriers are introducing VPLS-based Ethernet services, global competitors such as BT, Cable & Wireless and Verizon Business that have similar services on their roadmap should avoid further delay in announcing their service launches. These competitors can also consider establishing E-NNI to broaden their service coverage.

• SingTel can point out that it provides on-net coverage for its VPLS-based ConnectPlus E-VPN in more destinations than Reliance Globalcom, including Australia, China, Malaysia, Indonesia, the Philippines, Thailand and New Zealand. SingTel can also underscore its growing Ethernet customer base (including many MNCs that it can reference) as well as its MEF Best in Business (APAC) award in 2008 to win customer confidence.

• Tata Communications has been adding Ethernet PoPs and it should provide an update on its Ethernet coverage expansion. The carrier can also highlight its submarine cable investments and extensive coverage in India to counter Reliance Globalcom’s capabilities. In addition, Tata Communications can emphasize that it offers two separate platforms – Priority Ethernet (Ethernet-over-SDH) and Dedicated Ethernet (Ethernet-over-MPLS) – to meet different customer requirements.

Recommended End User / Customer Actions

• Customers that require Ethernet any-to-any connectivity on a global scale should evaluate Reliance Globalcom’s Ethernet/VPLS services, especially those companies looking for connectivity to India and the oil-producing regions of the Middle East. The carrier’s Ethernet services are now available in 17 countries and it is able to extend its coverage to 36 countries through partnerships with other carriers.

• Enterprises that have many or most sites in Asia Pacific including Australia and China should also consider other Ethernet service providers including NTT, SingTel, Tata Communications and Telstra International, since Reliance Globalcom has limited connectivity options in the region.

CLIENTS ONLY

Current Perspective

Competitive Positives and Concerns

Recommended Vendor Actions

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