Cable Tech

WWP Scores With Brits

Ethernet systems hopeful World Wide Packets Inc. has formally announced U.K. cable operator NTL Inc. (Nasdaq Europe: NTLI) as a customer (see NTL Uses World Wide Packets).

The vendor had initially outlined the engagement last summer, when it also named the U.K.'s other cable operator, Telewest Communications Networks plc (Nasdaq: TWSTY), as a potential customer.

Why make the announcement now? For one thing, it neatly coincides with NTL's enterprise broadband publicity drive (see NTL Studies Broadband Biz Benefits and NTL Targets UK Corporates With Sinergis).

But the deal raises the question of whether WWP's presence in the networks of both of the U.K.'s cable firms is a coincidence. Martin Gunn, NTL's head of customer engineering, says it is, and that NTL's initial relationship was struck in "perfect isolation" 18 months ago. "Only once we were dealing with World Wide Packets did we find out that Telewest was using its system, too."

Since then the two cable firms, which operate in different areas in the U.K., have engaged in a "mutual learning experience," says Gunn.

That should stand them in good stead. NTL and Telewest have long been tipped to merge once they've sorted out their respective financial difficulties (see NTL Cuts Quarterly Loss, NTL Cuts 1,500 Jobs, NTL Proposes Refinancing, NTL Emerges From Chapter 11, and Telewest Takes Restructuring Step). If and when that merger happens it'll be easier for them to integrate their networks and back office systems if they have mutual suppliers.

Is WWP the only Ethernet gear firm to have found favor at NTL? Well, it is now. Gunn says NTL, having considered the full range of metro and access Ethernet system suppliers, had initially decided to use WWP at the edge and Riverstone Networks Inc. (OTC: RSTN.PK) in the metro core.

"At the outset, Riverstone had a more coherent story for the metro core, while World Wide Packets was earlier in its development. But it caught up rapidly and was more in line with our way of thinking. It had a more pragmatic approach and was less concerned with grabbing the headlines."

Gunn says WWP has shown great awareness of NTL's needs in its development, and has offered "excellent technical support, and provides a system that's very easy to manage."

Now NTL is building out as and when the demand exists, and Gunn says there's "enormous demand" for Ethernet access services in the U.K.'s local government sector, which is the market NTL is concentrating on at present.

Riverstone seems relaxed about being edged out. EMEA marketing manager Gary Holland says, "It's a pity we didn't win the deal, but it's good to see another U.K. operator offering Ethernet services. We welcome that." [Ed. note: Jolly good sport, he is!]

WWP's British success is nice, but there's a question of whether the company has anything else in the tank to cheer its investors, who are in for a total of $114.4 million to date (see World Wide Packets Tops Up Tank).

What of Dutch incumbent KPN Telecom NV (NYSE: KPN), which was the other European customer WWP touted last summer? That's proving trickier to close off, says WWP's VP of marketing, Barry Kantner.

"We're still engaged with KPN, but it's re-evaluating its plans, and it's a large carrier and a slow mover. "We don't expect any revenues from KPN this year, but we expect to have five or six customers in Europe by the end of 2004, not including KPN."

WWP won't pin down its revenue hopes for the NTL deal, either. "It's tough to put a figure on that, says Kantner. "There's no actual size to the deal. We'll get more revenues as NTL gets more customers and builds out its network."

While the exact revenue is uncertain, WWP expects NTL and China's Great Wall Broadband Network Service Co. Ltd. (GWBN) to be its biggest revenue earners to date (see Great Wall Deploys World Wide Packets ). A WWP spokesman adds that the vendor expects to be cashflow positive by the end of 2004.

WWP has signed up 64 customers to date, mostly in North America, with about an even split between carriers (ISPs, CLECs, cable providers) and municipalities (for examples, see Virginia Goes World Wide and Danville Deploys World Wide Packets). In addition to issuing a press release about Telewest soon, WWP expects to announce a deployment at the Dubai Marina development in the coming months.

— Ray Le Maistre, International Editor, Boardwatch

Sign In