The global road leads through Europe

The days of carriers being satisfied with a strong national network have given way to the ever-present desire to obtain a global network and serve as a global carrier. Carriers are pouring money into the world's oceans and countryside, fearing their competition will beat them to market with end-to-end services.

The first step to a carrier's global network appears to run through Europe, the world's second largest economy. Eyeing that market's underdeveloped fiber infrastructure, some carriers are building their own networks, while others are forming joint ventures with foreign companies.

First and foremost on the global buildout appears to be MCI WorldCom, with fiber in 12 European countries.

"MCI WorldCom has cobbled together the largest network worldwide. They are the first to be able to go end-to-end between Europe and the United States," said Mark Langner, communications services analyst for Hambrecht & Quist. "That is a decided advantage in today's market. They lease tons of [fiber], but the reality is that they also have a lot of their own. MCI WorldCom has a decided advantage in the marketplace, but Global Crossing and Qwest are nipping at their heels," he said.

Other domestic long-distance carriers fall short, Langner said. "With the Sprints and the AT&Ts of the world, I think they are still operating with a serious amount of legacy along those lines."

Langner is skeptical about AT&T's partnership with BT. "They won't achieve the same quality as they would [if it were all under one roof]," he said. "The old way of doing business has proved itself to not be successful on the global scale and that's why you see [MCI] WorldCom being very successful with their end-to-end product."

Providing services across country and carrier borders becomes extremely complex very quickly, Langner said. "The world is littered with partnerships that didn't work. There are numerous big partnerships that have been less than spectacular in their execution. Every network is like a fingerprint and when you try to bring it all together, it is a lot easier to do under one roof."

Some of the newest players in the global market, including Viatel and Global Crossing, are building their own networks rather than leasing them.

"We found we had difficulty getting affordable cross-border capacity in Europe," said Glenn Davidson, vice president of corporate communications and community affairs for Viatel. "We were much better off owning the capacity rather than leasing."

U.S.-based Viatel is doing what it calls a "third-currency capacity swap" to enlarge its footprint. In one such agreement with WorldPort Communications, Viatel exchanged capacity on its Pan-European Circe network for 155.5 Mb/s of trans-Atlantic capacity.

Circe ultimately will extend 5100 kilometers. The first phase-connecting London; Amsterdam and Rotterdam in the Netherlands; Brussels and Antwerp, Belgium; and Paris and Amiens, France-was recently completed.

Meanwhile, Global Crossing has a fully operational trans-Atlantic system and is constructing a Pan-European network, scheduled for service in the fourth quarter.

People can say that they own their entire network, but not many are doing it. Global Crossing has done it, said Robert Annunziata, CEO of Global Crossing.

"We will have 71,000 cable miles undersea and terrestrial," Annunziata said. "No one comes close to that-we are really doing what everyone else is talking about. We expect that they will use our facilities and if they do ever complete some of the networks they are talking about, they will use their own. But there will be other opportunities. That's why we aren't just a carrier's carrier anymore."

Eventually, Global Crossing plans to install fiber around the world.

Other companies, such as BT and Global TeleSystems Group, are piecing together a combination of leased facilities and capacity that they have installed themselves. BT and its European partners just turned up their 45,000 kilometer Pan-European network, which eventually may serve as AT&T's European arm.

"Go global or go broke-that's what most multinationals are realizing and trying to address," said Jack Bartlett, senior vice president of marketing for BT.

While Europe is the current hot spot, several companies, including Global Crossing, eventually plan to install fiber around the world.

But some question how widespread network modernization will be.

"It is high time that carriers convey the truth of what global networks will be," said Ken McGee, vice president of research for The Gartner Group. "There will not be ubiquity to every country in the world with equal levels of service."

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