WaveSmith's Frame Relay Connection
Yes, that's right. Frame relay, the so-called "legacy" networking technology that, like ATM, seems to be again in vogue (see The Great ATM Switch Blitz).
WaveSmith has added frame relay capabilities to its DN 2100 and 4100 edge switches, which are geared to helping carriers take advantage of their Asynchronous Transfer Mode (ATM) networks while planning a move to packetized links managed via Multiprotocol Label Switching (MPLS).
WaveSmith, a startup whose products are still unreleased (see WaveSmith Too Good to Be True? and WaveSmith Closes $31M Round), says the move reflects carriers' needs to tap their existing facilities for all they're worth. But the vendor claims it also heralds an imminent regulatory shift that's about to launch the RBOCs into the multibillion-dollar long-haul frame relay market, which up to now has been dominated by interexchange carriers (IXCs).
WaveSmith says the FCC is about to loosen restrictions that could enable the RBOCs to own 20 to 40 percent of the overall frame relay services market, valued at $15 billion this year, according to Vertical Systems Group.
And guess who'll be ready for them?
Is WaveSmith right about this? Or is the startup putting its eggs in a basket that could fail to materialize? Do they know something we don't? Opinions differ.
"I think RBOCs will start moving into frame relay, but not as much as WaveSmith thinks they will," says Maribel Dolinov, senior analyst at Forrester Research Inc.
"I think WaveSmith's tack is viable," says Beth Gage, VP of consulting at TeleChoice Inc.. "RBOCs seem to be winning and getting their way more often than not, lately." If even one succeeds in gaining permission to go national with frame relay, that could give it 20 percent of the market, if pricing is right. "It would be similar to what Qwest Communications International Inc. [NYSE: Q] did with long distance," Gage notes.
There seem to be strong indications that RBOCs are making inroads in key service areas (see FCC Stirs Up Competitive Carriers). And even though the FCC hasn't lifted long-distance restrictions that would allow RBOCs to go into national frame relay, WaveSmith's news just might signal something's afoot.
Spokespeople hint strongly that WaveSmith's been trialing in key RBOC sites, even displacing Alcatel SA (NYSE: ALA; Paris: CGEP:PA) and other rivals in tests at a key "southern ILEC." They also boast of trials at Verizon Communications Inc. (NYSE: VZ) and say RBOC-based national frame relay has a good chance of emerging there first.
Verizon did not return requests for information at press time.
If WaveSmith does gain entrance at an RBOC, that could be big news, worth building on as aggressively as possible in order to attract more business.
WaveSmith insists its RBOC bid doesn't mean it's abandoned the other carriers that are part of its strategy. Indeed, the vendor claims that only two of its ten-odd trials are at RBOCs, while one is at an IXC and others are at independents. In the past, WaveSmith has claimed to be in talks at Cable & Wireless PLC (NYSE: CWP), Comcast Corp. (Nasdaq: CMCSA, CMCSK), and Genuity Inc. (Nasdaq: GENU).
Only time will reveal all that's behind WaveSmith's enthusiasm for RBOC frame relay. But one thing is beyond dispute: The startup needs to get a key customer, of any ilk.
As Forrester's Dolinov puts it: "A company's not valuable until someone buys their stuff."
— Mary Jander, Senior Editor, Light Reading