DISOWNING THE NETWORK
Given the ever-rising number of bankrupt and troubled telecom carriers, large enterprise customers now find it challenging at best to confidently select a long-term, low-cost provider of telecom services. Consequently, many of these customers are following the lead of large universities and research organizations by acquiring their own dark fiber networks and, in some cases, their own national optical networks.
Lehman Brothers, Ford and Colgate-Palmolive have acquired their own dark fiber networks, and Boeing plans to deploy its own private national optical network. Level 3 recently announced it would provide the dark fiber to connect most of California's universities and research centers, and a number of universities in the United States have acquired their own dark fiber networks.
Some of these organizations choose to own the dark fiber outright. Others opt for a “condominium” model, in which different organizations own separate fiber strands within a single cable and light up their own individual strands with the technology of their choice, with third-party fiber companies managing the fiber on its owners' behalf. Also emerging are condominium wavelength networks, in which enterprises own and control separate point-to-point wavelengths and a third party — often an equipment manufacturer or service provider — operates and maintains the optical equipment and fiber.
Although traditional carriers see this phenomenon as a competitive threat, a number of carriers and vendors realize these networks present significant business opportunities. For CLECs, customer-owned networks mean not having to make huge capital investments in infrastructure. More importantly, if a CLEC already has significant fiber assets, it can generate large revenues by selling the excess strands.
For ILECs, bandwidth is rapidly becoming a commodity, but the future of telecom lies in providing services, not selling low-margin bandwidth. When customers are free to purchase services independently of infrastructure, they will most likely select trusted, name brand national service offerings. Companies that can offer nationwide switched voice and data services will have a significant advantage in attracting this business.
The computer industry was once a business in which companies leased services, but as technology evolved, computers became affordable and businesses began buying their own. Though the PC undermined the old mainframe computer business, it created a new, much larger industry. Customer-owned networks could have the same revolutionary impact.
DOSSIER: BILL ST. ARNAUD
Occupation: Senior director of advanced networks, CANARIE, Canada's advanced Internet development organization
Location: Ottawa, Ontario
Current reading: “Guns, Germs, and Steel: The Fates of Human Societies” by Jared Diamond; “In Harm's Way: The Sinking of the USS Indianapolis and the Extraordinary Story of Its Survivors” by Doug Stanton
Next project: “Building my own backhoe.”
Want to use this article? Click here for options!
© 2013 Penton Media Inc.
In this Webinar you will learn how to create a real-time relationship with your customers, how to proactively improve the customer experience, and how to successfully target and cross-sell services to boost incremental revenue.
- Megabytes to Megabucks, Bandwidth to Business Models: How 4G Is Changing Everything
- How to Unplug Your Redundant Telco Apps To Save Money and Improve Efficiency
- When IaaS Isn't Enough: Service Provider Business Models to Drive Growth and Build Margin
- How to Transform Your Aging Telco Voice Network to Drive New Profits and Revenue
- Creative Licensing Approaches for Telcos & Their Network Equipment Vendors
- Smart Home Opportunity: Balancing Customer Data & Privacy
This paper discusses the rise of Diameter and benefits of Diameter Protocol.
- Conducting The Orchestration – Order Management at the Speed of Business
- Toward a Converged Network Edge
- Beyond Spam – Email Security in the Age of Blended Threats
- 6 Important Steps to Evaluating a Web Filtering Solution
- The Expertise to Protect You from Botnet and DDoS Attacks
- Seeing is Believing – Bridging the Order Visibility Gap
Service providers are under tremendous pressure to turn up new services faster then before and, at the same time,
to do it at less expense - and intra-office fiber is one of the biggest challenges in terms of both cost and service
From the Blog
Join the Discussion
Get more out of Connected Planet by visiting our related resources below:
Connected Planet highlights the next generation of service providers, as well as how their customers use services in new ways.Subscribe Now