Global Crossing Expands VoIP Local Service both North and South of the Border

On October 25th Global Crossing added VoIP Local Service in nearly 400 cities in the U.S., with additions including Las Vegas, NV, Salt Lake City, UT, and Tucson, AZ. The carrier also has expanded VoIP Local Service to 16 cities in Mexico. Global Crossing now offers the service in 21 countries and territories worldwide across the Americas and western Europe, plus Hong Kong. Global Crossing separately offers VoIP Outbound service in 29 countries worldwide.

Recommended Competitive Responses

► Tier 1 global carriers such as AT&T and Verizon Business should use their ability to mix TDM, VoIP and an array of network services in addition to IP and IP-VPNs, to contrast their breadth and depth of services against Global Crossing. These competitors can also tout a more comprehensive global reach for many of their services; along with a depth of consulting, professional services and in-country support staff that Global Crossing may not match directly.

► AT&T and Verizon Business can draw on their respective relationships with Mexico's carriers to tout their ability to provide a full array of business and enterprise services. AT&T has an investment stake in TELMEX and also an ownership stake in Alestra; Verizon has a continuing relationship through Axtel, which acquired competitive carrier Avantel at the end of 2006. BT Global Services acquired Comsat International in mid-2007, which operates in 30 cities in Mexico and has cross-border fiber connectivity to the U.S.

► Global carriers headquartered outside the U.S., such as Orange Business Services and BT Americas, should also contrast the breadth and depth of their services against Global Crossing, targeting multinational businesses that need much more than VoIP and data services.

► Telefonica should tout itself as the specialist for Latin America, with long-term, deep relationships with many carriers throughout the region. As with other global carriers headquartered outside the U.S., Telefonica can still present itself as being able to provide a similar spread of enterprise-class services as U.S.-based global service providers.

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Akamai and Starbucks: Would You Like Accelerated Content with Your Latte?

On October 18th Akamai announced a new technology relationship with Starbucks for the deployment of Akamai-enabled content delivery servers within thousands of Starbucks stores to provide wireless delivery of digital music. Akamai will serve as the exclusive U.S. content distribution provider, helping to facilitate the Apple and Starbucks music delivery partnership, Akamai's technology will route the content delivery from the iTunes Online Store to Starbucks locations, and enable customers to buy the music they hear playing in stores directly to their WiFi enabled iPods, iPhones and laptops.

Analytical Summary

► Current Perspective: Positive on Akamai’s new partnership with Starbucks as the venture shows new thinking in bringing content to users faster; in this case, the move supports Apple’s iTunes online content for music delivery to Starbucks’ customers via a WiFi connection inside the coffee shops.

► Vendor Importance: High for Akamai as the company needed to innovate with new ideas to distinguish itself with its clients, as well as expand new opportunities for revenue for the company to get content faster to where users congregate and access the network.

► Market Impact: Moderate on the CDN market, as few other CDN players have looked at pursuing this type of network topology for their content acceleration, much less colocating at a consumer access point such as Starbucks.

Recommended Competitive Responses

► CDN competitors in general will find little direct action needed as a result of this announcement, but should take steps to monitor and evaluate this partnership in light of how they might use this idea with their own clients and prospects.

► Limelight should look at ways that it can offer media clients delivery of content into new spaces beyond traditional user computers, such as powering displays and kiosks in retail locations, or enabling e-commerce solutions for clients in partnerships with retailers.

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AT&T Enhances Optical Mesh Service for Wholesale Customers

On October 16th announced a higher-speed option for AT&T Optical Mesh Service, giving wholesale customers a new 1 Gbps bandwidth-on-demand option for application support and control over their networks. Available in 275 locations nationwide, AT&T Optical Mesh Service allows customers to reallocate bandwidth by increasing or decreasing network capacity in near real time through the AT&T BusinessDirect customer portal.

Recommended Competitive Responses

► Competitors should note the apparent strength of demand for this service, which is unique among U.S. carriers, as evidenced by the steady expansion in the number of PoPs that are being equipped to support this service. AT&T has added 55 locations since the service was launched one year ago, and it will hit about 300 PoPs by year-end, which means half of the total number of access locations will provide access to OMS by the end of the year.

► Competitors can point out that AT&T’s Optical Mesh Service works by signaling requested changes to network bandwidth over pre-provisioned SONET access circuits to a set number of customer locations. While STS-x circuits can be quickly added or deleted to locations that are already on-net, access to new sites cannot be brought up any more rapidly than with a traditional SONET service.

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