Network puzzle takes form: Qwest to deploy equipment from Hughes, Nortel

Qwest Communications put in place a few more pieces of its nationwide Internet protocol network and services package last week. The Denver-based company introduced its IP telephony service, called Q.talk, in nine markets and announced plans to deploy equipment from Hughes Network Systems and Northern Telecom.

Q.talk's introductory rollout in Denver, Kansas City, Mo., Salt Lake City and Anaheim, Los Angeles, Oakland, Sacramento, San Francisco and San Jose, Calif., is Qwest's initial foray into the 7.5 cents-a-minute, IP-based long-distance service it announced late last year.

"One thing they are doing is building brand," said Brian Adamik, consumer communications vice president for The Yankee Group. "Q.talk is their first major effort at establishing brand in the broad consumer market."

The introduction is on schedule with Qwest's plan to have 25 cities up by mid-year and 125 cities up by 1999, according to Rick Weston, Qwest's marketing director for consumer products. Qwest's network eliminates latency problems that exist on the Internet, and its decision not to compress voice traffic ensures "toll-quality" calls, Weston said.

Currently, customers must dial a seven-digit local number to access the Qwest gateway, followed by a nine-digit access code before placing a call. The company plans to eliminate the need for the access code, Weston said.

The Hughes and Nortel deals address the continuing buildout of Qwest's network. Qwest and Hughes have formed a joint marketing alliance for asynchronous tra nsfer mode and frame relay products. Qwest will deploy Hughes' Radiant multiservice edge switches in its network and has designated Hughes as its first "Qwest-linked" technology partner.

The companies will try to leverage their relationship to build their individual customer bases, said Tom Jenkins, broadband analyst for TeleChoice.

"Hughes is not the primary [data] platform for any of the big four carriers right now," he said. "But they'll get the pull-through from Qwest, and Qwest will get pull-through from Hughes."

Qwest described its three-year, $50 million deal to buy Nortel's DMS 250 SuperNode tandem switching systems and ServiceBuilder Intelligent Network as a precursor to introducing Advanced Intelligent Network products later this year.

PSINet took its first steps into the telephony realm last week by forming a subsidiary to oversee all its telecom-related activities.

PSINet Telecom will own and operate the fiber its parent company acquired from IXC Communications last month, along with the rest of the transcontinental OC-12 backbone it plans to piece together over the next two years.

"Having a telecom division is necessary when you think about all the resources we have," said Pete Wills, executive vice president and chief operating officer of PSINet. "By the time we finish, we will have the equivalent of one of the biggest telecom companies in the world-it just happens to be optimized for [Internet protocol] service."

The new fiber will replace the company's existing T-3 copper backbone and ultimately handle all voice and data transport, Wills said. "All our traffic will go over the fiber as soon as we can get our hands on it," he said.

PSINet's voice-over-IP offering is currently in the beta testing stage, Wills said. Target customers-at least at first-will be businesses with multiple PBX sites because the network can be configured to look and operate like virtual private networks. That could appeal to multinational businesses because PSINet has received FCC approval to offer international services.

BELL LONG-DISTANCE ON HOLD A federal judge in Texas last week granted the FCC's request to stay his Dec. 31 order finding part of the 1996 Telecommunications Act unconstitutional. As a result, the Bell companies will be prevented from entering the long-distance market within their regions until an appeal is heard.

A CARRIER's CARRIER Frontier Communications will wholesale long-distance and calling card services to State Communications, a Greenville, S.C.-based competitive local exchange carrier. State primarily targets residential customers in Southern states. The agreement is valued at $40 million and marks Frontier's entry into carrier services.