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LR Picks Private Service Finalists

Light Reading
News Analysis
Light Reading
11/19/2004

Perhaps the most exciting area in telecom, new services are bubbling over with ideas that aren't coming from Bell Labs kinds of operations. Startups are taking notice of the demand for new ways to use the network -- either to save enterprises money or to simplify their operations -- and the result is a wave of promising new applications from the private-company arena.

The creativity and resourcefulness found in many of the entries is a clarion call to the big guys to watch their backs. The CLEC hordes might be pushed into a corner for now, but the new wave of services is no small threat. True, some can complement the RBOC/IXC models, but others are like 18-wheeler headlights coming down the wrong side of the highway.

All of this is made possible by the onward march of technology. Voice over IP (VOIP) is one obvious culprit, threatening to upend the century-old business model for telephone calls. The encroachment of data networking into the telco space is creating some intriguing possibilities as well.

Here are our bets for the services likely to make a difference. Finalists in the Private Company, New Service category of the Leading Lights Awards are those offerings that wield next-generation technology to produce a service with promising revenue prospects and a shot at market leadership.

  • DynamicCity's Utopia project.

    This finalist is a bit unconventional -- but that's exactly what makes it interesting. Municipal fiber networks are popping up all over North America, and DynamicCity and Utopia -- the Utah Telecommunication Open Infrastructure Agency -- offer an interesting method for solving the last-mile bottleneck.

    The short formula is this: Sell "revenue bonds" backed by the future revenue of the network. Build the fiber infrastructure, which is managed by DynamicCity, but leave the services access open to any service provider that wants to provide voice, video, and Internet. DynamicCity calls this the OSPN, for Open Service Provider Network model.

    Utopia's "Phase 1," launched in July and managed by DynamicCity, is a partnership of 14 municipalities in Utah (see Utopia Launches Phase I). It's delivering 100 Mbit/s of fiber connectivity directly to homes in those communities. Utopia says its average cost of delivering FTTP is an impressive $1,171 per subscriber.

    Given the significant political and economic barriers to developing the last mile, innovative municipal approaches such as this are helping to drive fiber access.

  • Masergy Communications Inc.’s Intelligent Transport

    With this offering, launched in June, Masergy can tick the right boxes of the most demanding enterprises. It's a global Ethernet service with multiple quality of service (QOS) levels and a Web-based management tool, the Service Control Center, that puts users in control (see Masergy Intros 'Intelligent Transport' ).

    Demand is certainly out there -- Heavy Reading’s research shows that extending Ethernet to all locations in a large network via virtual private LAN services (VPLS) is a major issue for enterprise users that have increasingly mobile workforces. And Masergy has built a reputation for being reliable and economical -- the latter being key, as enterprises aren't all so keen on paying for the Ethernet services they crave (see Enterprises: We Want Our Ethernet!). The Goliaths of the international services sector need to sit up and take note, especially as Masergy continues to bolster its networking capabilities (see Masergy Makes Layer 3 Jump and HR Sees Ethernet Services Explosion).

  • Skype Technologies SA's Skype 1.0

    Since Skype burst onto the scene in August 2003, its peer-to-peer VOIP package has been downloaded by more than 32 million users. Skype’s free multi-platform software allows users to make free calls over the Internet and low-cost calls to traditional land-line numbers. The company boasts that its service offers superior sound quality and uses a wider sound spectrum than traditional telephones, so you at least won't sound like a cheapskate making free calls on your computer. But wait, there's more: Skype offers conference calling, instant messaging, and file transfer services -- practically anything an office could want.

    Created by Kazaa co-founders Niklas Zennström and Janus Friis, Skype has formed partnerships and alliances with heavy hitters such as PChome Online, Plantronics, and Siemens AG (NYSE: SI; Frankfurt: SIE), and carriers Colt Telecom Group plc (Nasdaq: COLT; London: CTM.L), iBasis Inc. (OTC: IBAS), Level 3 Communications Inc. (Nasdaq: LVLT), and Teleglobe International Holdings Ltd. (Nasdaq: TLGB). With backing from top-tier venture capital firms including Bessemer Venture Partners, Draper Fisher Jurvetson, Index Ventures, and Mangrove Capital Partners, Skype is poised to expand its blossoming service even more during the next year.

  • Virtela Communications Inc.'s MPLS Service Fabric

    Virtela's latest service links an enterprise to a multitude of Multiprotocol Label Switching (MPLS) networks, just as the nebulous Internet links them to multiple Internet Protocol (IP) networks. Usually, an enterprise would be forced to tap multiple service providers to create this kind of global MPLS network; Virtela hopes to attract customers by having done that work already (see Virtela Expands Into MPLS).

    This gives a large enterprise (or a small one with offices on multiple continents) a single MPLS carrier, so it isn't dealing with different providers in different regions of the world. On paper, the enterprise also gets a more robust service, because Virtela's web of networks provides a multitude of alternative paths should one network node fail.

    Virtela announced the service in October, by which time it had roughly a dozen customers up and running. The company claims its proprietary algorithms -- which find the optimal routes among the networks being tapped -- make the service tough to duplicate. There's also the legwork to consider -- the company covers 190 countries through deals with more than 200 service providers, the kind of span that doesn't happen overnight. Finally, Virtela has a track record, as it's already providing a similar service for IP VPNs (see Virtela Scores $11M for VPN Net).

The winner will be announced at our Awards Dinner after Light Reading's Telecom Investment Conference in New York City on December 15th.

— The Staff, Light Reading


  • For more information on the Leading Lights Awards, click here.

  • For more information on Light Reading's Telecom Investment Conference, click here.

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    dljvjbsl
    dljvjbsl
    12/5/2012 | 1:03:34 AM
    re: LR Picks Private Service Finalists
    The article mentions that Skype does or shortly will offer features that are practically all an office could want. I suppose that this depends on what the word Gă practicallyGăÍ means. I can see the absence right now of features that are necessary to see a system into an office environment. I can also note that these features would seem to be very difficult to create on a peer to peer model such as the one that Skype G㢠not impossible G㢠just very difficult to create and manage. I, personally, will wait to these necessary features in operation before declaring that Skype has a fully featured business system

    ⅞
    Standardsman
    Standardsman
    12/5/2012 | 1:03:32 AM
    re: LR Picks Private Service Finalists

    For the price of a few $10 PC headsets, my company is saving $1,000's by using skype for our international inter office calls. The quality is good enough for internal use. Just remember, don't talk at the same time due to the delay.
    It's just 1 click to talk when you know someone is available at their desk. It is much better than dialing 13 digits to get voicemail. ..Yes I a have not figured how to use the speed-dial..

    We even do conference calls between 3 countries for free!
    rjmcmahon
    rjmcmahon
    12/5/2012 | 1:03:32 AM
    re: LR Picks Private Service Finalists
    From the article

    Municipal fiber networks are popping up all over North America, and DynamicCity and Utopia -- the Utah Telecommunication Open Infrastructure Agency -- offer an interesting method for solving the last-mile bottleneck.

    The short formula is this: Sell "revenue bonds" backed by the future revenue of the network. Build the fiber infrastructure, which is managed by DynamicCity, but leave the services access open to any service provider that wants to provide voice, video, and Internet. DynamicCity calls this the OSPN, for Open Service Provider Network model.


    I wonder if the formula could ehnanced to move "last mile" ownership into the hands of the customers. Something like "fee-simple" used for the common land of condominium buildings might work.

    http://mauibuyersbroker.com/pr...

    The best way to describe Fee Simple, is to say that it is the type of ownership that most of you are accustomed to. You purchase property, receive title and it's yours or your heirs forever, or until such time that the property is disposed of.

    Then whenever a house was sold, or refinanced, the new fiber utility could be added on as part of the land improvement. This may help monetize the sunk costs as well as provide incentives to realtors and title companies to help modernize our communication facilities.
    dljvjbsl
    dljvjbsl
    12/5/2012 | 1:03:25 AM
    re: LR Picks Private Service Finalists
    With long distance charges in the range of 1 to 5 cent per minute, there must be a whole lot of long distance calling to create a savings of thousands. Even at 5-ˇ per minute $2000 in long distance charges would mean 40,000 minutes or 666⅔ hours or 27.8 days of calling per month. This would seem to be a highly unusual situation for small business.

    Long distance toll charges are not a significant cost factor any more This is not a signticant advantage for Skype or other VoIP providers.

    ⅞
    telecom_guru
    telecom_guru
    12/5/2012 | 1:03:25 AM
    re: LR Picks Private Service Finalists
    Promising, but I find the quality still sucks. There is no consistancey and probbly depends on how fast of a connection you have purchased?

    OK for occasional personal use but has a long way to go.... promising though...
    Light-bulb
    Light-bulb
    12/5/2012 | 1:03:12 AM
    re: LR Picks Private Service Finalists
    I think your missing the point there dljvjbsl. The point is not that LD can be had for cheap through existing mediums, but rather LD can be had for free through existing medium. You may be correct about 5c/Minute for National calls, however your are grossly wrong on international calls, they can range past the $1.00/min mark, not to mention the application where you have a conference call between 5 professionals in different countries? Do the Math again, you've forgotten many variables.

    Cheers,
    dljvjbsl
    dljvjbsl
    12/5/2012 | 1:03:08 AM
    re: LR Picks Private Service Finalists

    You may be correct about 5c/Minute for National calls, however your are grossly wrong on international calls, they can range past the $1.00/min mark, not to mention the application where you have a conference call between 5 professionals in different countries? Do the Math again, you've forgotten many variables.


    The 5 cent/minute rate is what I get from my home plan. My rate to the UK and Europe is 6 cents/minute. My long distance carrier sends me a bill every three months or so when my cumulative bill reaches around $20. I presume that the postage and processing charges would erase any profit if it tried to bill any more frequently. I have heard that companies of any size can negotiate rates down to the 1 cent per minute and below range.

    What this really means, at least to me, is that LD charges are not a significant factor in the broad acceptance of VoIP. Aside from individuals and small companies who conduct an extensive amount of LD calls to certain countries, there is no finacial impetus for the acceptance of VoIP. VoIP can and is justified on other grounds

    The lack of features in Skype; the difficulty that Skype will have in the creation of realistic feautres; the compeition from established carriers and switch vendors, all make sceptical that Skype will be able to compete.

    7/8
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