WORLDCOM LAUNCHES NATIONAL ETHERNET

WorldCom filled in a major strategic hole in its service portfolio last week by announcing a nationwide optical Ethernet play in 84 markets.

WorldCom will offer a suite of services, ranging from dedicated gigabit Ethernet to private-line, metro and wide area Ethernet services. The full range will be available initially in major metropolitan areas such as New York, Chicago and San Francisco. More limited offerings will be launched in every city where WorldCom operates a metro area network.

WorldCom's launch, the first major product announcement since John Sidgmore took the helm, comes at a time when other major carriers have begun to beef up their portfolios after the original rush to next-generation services from smaller carriers. But while the competitive carriers may be the first onboard with optical Ethernet, WorldCom and other major service providers can offer a more complete solution to their customers, said Jon Zymaris, director of Ethernet and security services for WorldCom.

“The smaller providers jumped into the market with one solution set — they niched in a particular technology or market,” Zymaris said. “The breadth of our service set is much larger, covering a broad solutions set. We also have our own fiber, and we own the networks in the buildings. That gives us a significant competitive advantage.”

Smaller players by contrast have run into significant problems because they don't own their networks and are at the mercy of potential competitors that priced wholesale access too high.

Frost & Sullivan telecom services analyst Rod Woodward said WorldCom's announcement might be the first of several coming from the major IXCs, now that the market's appetite for next-generation services has been whetted.

“This isn't the kind of announcement you'd expect from the big three,” Woodward said. “This kind of high-speed Ethernet offering is usually in the space of Yipes or Level 3. It shows that the big carriers are showing a commitment to next-generation technology.”

The magnitude of WorldCom's launch also is significant, Woodward added, saying it is a particularly big win for Nortel Networks. While neither Nortel nor WorldCom released any specific figures for the contract, Woodward estimated it was well into the range of hundreds of millions of dollars.

Nortel, which already has deals under its belt with SBC Communications, Bell Canada, KDDI and Telus, said it expects the number of announcements to increase as more large carriers hop onto the optical Ethernet bandwagon.

“Service providers will be rolling out these services slowly at first, but they will roll them out,” said Steve Garcia, Nortel's director of optical Ethernet marketing.