XO Sweats Its Optical Assets

"10 Gigs in 10 Days" -- isn't that something Britney might try to do in a desperate attempt to power her way back onto the live tour scene?

Maybe, but it's also a wholesale capacity offer that national U.S. network operator XO Communications Inc. is touting for a further three months, having first launched the offer back in early November 2007. (See XO Extends Offers and XO Completes 800G Upgrade.)

The offer looks, at first glance, like the crazed idea of a carrier marketing team that's overdosed on espresso –- guaranteeing 10 gigabits of capacity within 10 working days on certain routes, and offering one month of free service for each year of the customer's contract if that provisioning deadline isn't met.

But it isn't so crazy. Underpinning the offer is the Infinera Corp. (Nasdaq: INFN) gear that XO has been deploying during the past 18 months or so. That's because one of the key attributes of Infinera technology is that, compared with traditional optical gear, it has very short lead times for capacity upgrades -- and that's an attribute that has been a key attraction for other Infinera customers. (See Brits Build Backbone With Infinera .)

XO says the offer wouldn't be feasible without the Infinera gear, and it's made possible by pre-provisioning capacity on the routes included in the offer, which the carrier says include all of its coast-to-coast and many of its other high-demand routes.

The carrier says it has seen a lot of demand for this offer from new customers, especially Asia/Pacific and European operators looking to expand their North American networks, and so decided to extend the offer from its initial two months to five months, ending March 31. And it's possible that the 10-day guarantee might even be extended indefinitely, says an XO spokesman.

The operator, which is now also making a big push with extended IP service capabilities, also tells Light Reading that the incentive to create the quick turnaround capacity offer was to capitalize on the "provisioning issues" that one of its competitors has been having. (See XO Expands IP Services.)

XO didn't name names, but the rival in question -- and a bitter rival at that -- is known to be Level 3 Communications Inc. (NYSE: LVLT). (See XO Wins Ruling.)

But XO isn't the only carrier that has built an enticing marketing pitch around its Infinera technology base. Pan-European operator Interoute Communications Ltd. launched its "Rapid Delivery Bandwidth" service in May 2007, with the operator also offering to provision a 10-Gbit/s wavelength or a 10-Gbit/s Ethernet service across its Central and Western European footprint, where it has deployed Infinera gear, in -- would you believe it -- 10 days. (See Interoute Offers Rapid Capacity and Infinera Muscles Into Interoute.)

While Interoute's CTO, Matthew Finnie, says there hasn't been a big queue of customers knocking on the door for the service so far, he notes that the capacity his firm has pre-provisioned on its network to meet any such demand has come in very handy in supporting the network restoration deadlines included in service level agreements.

"Fiber cuts are the most common problem," notes Finnie, who claims that a customer can quickly (within an hour) and easily be switched over to the new network while the fiber problem is dealt with, and then switched back just as easily. "It's a big advantage operationally -- we are more likely to hit our SLAs now."

The rapid provisioning times also mean that Interoute is no longer playing catchup with wholesale market demand. "One thing we can do now is stay ahead of demand. We're whacking in new capacity all over Europe to keep ahead. In certain parts of the network we're up to 400 Gbit/s of capacity, for example in Central Germany, and the route in and out of Spain is very busy," says Finnie.

And there's no time limit on Interoute's offer -- it's here to stay, says the CTO.

— Ray Le Maistre, International News Editor, Light Reading

redface 12/5/2012 | 3:49:39 PM
re: XO Sweats Its Optical Assets If Level 3 is the bitter rival of XO that has "provisioning issues", then it's weird: Level 3 also uses a lot of Infinera gear and therefore should have no problem with rapid provisioning. What gives?
Ryan Lawler 12/5/2012 | 3:49:38 PM
re: XO Sweats Its Optical Assets This is just a hunch, but it seems to me that most of Level 3's provisioning issues probably come from recently acquired assets that presumably aren't running on Infinera gear.
Ryan Lawler 12/5/2012 | 3:49:38 PM
re: XO Sweats Its Optical Assets This is just a hunch, but it seems to me that most of Level 3's provisioning issues probably come from recently acquired assets that presumably aren't running on Infinera gear.
hyperunner 12/5/2012 | 3:49:38 PM
re: XO Sweats Its Optical Assets Same thought occurred to me.

I guess it has to be Infinera at both ends to make the 10 day deadline. So maybe XO has enough Infinera in their network to achieve the speed advantage, but Level 3 maybe has a mixture of gear so they're at the mercy of the infamous optical lead times!

gzkom 12/5/2012 | 3:49:37 PM
re: XO Sweats Its Optical Assets LR still fails to straight out with the symbol of XO: it is XOHO.ob rather than XOCM.
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