Global Crossing Preps Major US Upgrade

Company will build first US data centers and upgrade to ultra-long-haul optics to meet demand for cloud services and IP video

February 23, 2011

2 Min Read
Global Crossing Preps Major US Upgrade

Global Crossing (Nasdaq: GLBC) will make major upgrades to its North American network in 2011, including setting up two data centers and beefing up its core network with ultra-long-haul capability, company officials said Tuesday after announcing improved earnings for 2010. (See GC Posts 2010 Earnings.)

The major upgrade will largely be funded by current budgets, says Dave Carey, CMO for Global Crossing, who added that the current market for IP transport and advanced services, including cloud and managed service offerings, is a "rational" one. Global Crossing had earlier announced a strategy to add 40Gbit/s service in North America and Europe. (See Global Crossing's 'Different' 40G Strategy.)

"As you get into data center and hosting, we have been able to raise prices, which is a little unusual in this industry, but that has been the case, and it's true in Latin America and Europe as well," Carey says. "With regards to other product lines, our main lines of service like IP transit, retail prices have been pretty stable, and we are seeing the volume pick up."

Carey wouldn't identify where Global Crossing will be setting up new North American data centers, but the company operates 100 collocation sites in North America, so it has the necessary connectivity. The backbone upgrade will include additional slots on existing Infinera Corp. (Nasdaq: INFN) gear and ultra-long-haul optical equipment from a supplier to be named at a later date.

In addition, Global Crossing is likely to announce upgrades to its subsea routes connecting Europe, North America and Latin America as well, Carey says.

Cloud services and expanded services for market verticals will be key growth areas for 2011, he says.

The company is expecting faster pace growth in 2011 -- in the 6 percent to 9 percent range -- says CFO John Kritzmacher.

One source of that growth will be video traffic, as Global Crossing expands through its Genesis Networks acquisition. Already, the company has brought Genesis to Latin America, where it was not previously operating. (See Global Crossing Buys Video Provider.)

"IP traffic today is largely video, largely consumer demand, driven by additional interfaces from smartphones and iPads, and the position we took with Genesis put us dead square in that video space," Carey says.

— Carol Wilson, Chief Editor, Events, Light Reading

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