BT Wholesale Improves Ethernet Range in Several Directions and is Offering Limited Period Discounts

| Mar 11, 2011 | Wholesale Services
| Analyst: Joel Stradling

Event Summary

February 18, 2011 – BT Wholesale improved its Ethernet range in multiple directions. The company offers more speeds, including 10 Gig-E (launched December 2010) as well as sub-Megabit speeds; discounts including for example 50% less on rental fees for ‘Standard Etherflow’ and 25% off Etherway one-off connection charges; and faster time-to-repair (down from 24 hours to seven hours for EFM Etherway); and additional resiliency options. Enhancements have also been made to the customer self-service portal.

Quick Take

Analytical Summary

• Current Perspective: Positive on BT Wholesale’s considerable list of product improvements to its Ethernet access and end-to-end circuits offerings, because the carrier is in a stronger position to defend its entrenched legacy services business by transitioning those customers onto Etherway and Etherflow. The company’s discounted prices, expanded product choice, and service enhancements should also drive new sales wins in a competitive environment.

• Vendor Importance: High to BT Wholesale, because the carrier needs to enrich its Layer 2 Ethernet service range to prevent losing its established legacy services customers over to UK competitors that are aggressively pursuing Layer 2 Ethernet service strategies. BT Wholesale has been reactive with Ethernet in comparison with for example Colt and Virgin Media Business, and needed to make service level improvements, give greater choice and offer pricing discounts to differentiate.

• Market Impact: High on domestic UK wholesale Ethernet market segment, because BT Wholesale is a leading national operator in terms of national presence, operations, networks assets and market entrenchment. Hence the service improvements and special pricing offers rattle the market. BT Wholesale an essential choice in any evaluation pool of suppliers, and the suite of enhancements recently added place considerable pressure on rivals. In response, competitors will be pointing to their own progress to be innovative in Ethernet supported by NGN investments and on-going efforts to be competitive on price.

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Competitive Strengths and Weaknesses

Response & Recommendations

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Analytical Perspective

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