TelePacific Outlines Ethernet Strategy, Including EoC Plans and Progress

Event Summary

December 7, 2010 -- TelePacific has installed Ethernet over copper (EoC) in 52 of its 273 wire centers covering California and Nevada, and the company intends to expand its EoC coverage to 120 wire centers by the end of Q1 2011. TelePacific's EoC options deliver service at speeds of 1 Mbps to 10 Mbps. The service complements the company's Ethernet access options delivered over leased lines and over fiber.

Quick Take

Analytical Summary

• Current Perspective: Moderate on TelePacific’s EoC expansion, because it is part of the CLEC's multi-prong Ethernet access strategy, offering services that are broadly available across its footprint and compatible with its IP portfolio. The hallmark of facilities-based CLECs such as TelePacific is that they own and operate their own access equipment in local wire centers and central office colocations. With its EoC expansion, TelePacific is building on those assets, differentiating the facilities-based CLEC from other types of competitorsr.

• Vendor Importance: Moderate to TelePacific, because the company needs services that go beyond the traditional service delivered by T1. The cable provider/ILEC competition for small businesses has resulted in high-capacity, low-cost business broadband offers, and broadband-based packages will increasingly work their way up into mid-market clients. TelePacific and other CLECs need products such as EoC to distinguish themselves from leased lines and find new market growth opportunities.

• Market Impact: Moderate on TelePacific's competitors in California and Nevada, because the provider will be able to offer low-price Ethernet access to mid-market and larger business customers at the attractive price points of EoC. Though access is only one component of an overall contract, competitors using leased-line access may be at a disadvantage in situations where they face off against TelePacific's lower-priced EoC when trying to sell to both cost-conscious mid-market and larger businesses.

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