Wholesale/transport services

BT Makes Waves in Its Access Net

BT Group plc (NYSE: BT; London: BTA)'s access network division, Openreach , is capitalizing on new vendor capabilities to revamp its wavelength access services to retail service provider customers that need to plan for the tough task of making money from bandwidth-hungry enterprise services.

Until now Openreach's optical spectrum services have tended to be "one-size fits all" offers and haven't been marketed as prominently as its range of Ethernet services, which has been heavily promoted in recent years. (See BT Unveils Ethernet Expansion Plans and BT Business Adds Ethernet.)

Now, though, the division is coupling the new capabilities it can get from ADVA's FSP (Fiber Service Platform) 3000 with a more consultancy-based bespoke service targeted at the specific requirements of customers that need flexible access network capacity.

Openreach currently has 250 retail service provider customers in the U.K. using its network services for a range of residential and enterprise services, with about 50 of those currently buying access wavelengths. For its optical spectrum services, which enable those customers to buy wavelengths of 2.5 Gbit/s or 10 Gbit/s on dedicated fibers, Openreach uses network equipment from ADVA (the FSP2000, for service reach of up to 35 kilometers) and Ciena (the 4200, for up to 70km). Both DWDM platforms enable up to 32 wavelengths per fiber. (See BT Uses ADVA for Optical Access.)

Now, though, Openreach will (from early 2012) deploy the ADVA FSP3000 (1-unit and 7-unit chassis options) that can provide service reach of up to 55km, enable shorter provisioning times of 35 days and offer wavelengths in not just 2.5Gbit/s and 10Gbit/s options but 40Gbit/s too. In addition, the single rack-unit box provides a lower entry cost to Openreach's customers with improved power and space efficiencies.

An additional capability with the FSP3000 is that Openreach will now be able to provide its customers with latency readings for specific services as part of the pre-sales process, an important move for its customers that need to know what sort of latency guarantees they can offer to key customers in vertical sectors such as finance.

In addition to these capabilities, Openreach has revamped its optical spectrum services team to offer what it calls "hybrid" packages -- including more up-front consulting help with network planning, application development and business model development -- that are tailored specifically to customers' long-term needs, depending on whether those customers are "opex or capex loaded," stated Richard Thorpe, director of Ethernet and optical products at Openreach during a presentation at the BT Tower in London Monday morning .

Why this matters
Openreach's customers, which include its sister division BT Retail, are facing increasing bandwidth demands from their enterprise customers, which need fatter pipes to hook up to storage facilities and data centers and be able to use capacity-hungry services such as telepresence. In addition, growing mobile data volumes are starting to eat up capacity on local as well as wide area networks. The challenge for Openreach's customers, though, is to capitalize on these bandwidth demands without having to stretch their finances by adding circuit after circuit.

More than ever before, then, wavelength services in the access network are more relevant to a broader range of customers, while new vendor platforms such as ADVA's FSP3000 are, at the same time, providing capabilities that make wavelengths cheaper to offer. What will be key to this renewed focus on access wavelengths is whether Openreach can find the sweet spot for a service that will demand a greater initial investment up front from its customers. BT knows this -- it is quite open in saying that for customers using a single wavelength, a data circuit can be bought from a rival at a lower price. But Openreach also claims that once the customer has lit three or more wavelengths then the operational savings kick in when compared with the alternative option of adding additional circuits from a rival.

"Big data transfers are the future, so planning ahead is vital. This requires investment [up front] but the long-term savings can be attractive," stated Darren Wallington, head of Optical Solutions at Openreach.

And with its own eye on the future, Openreach is looking at 40Gbit/s and 100Gbit/s options for its access services portfolio.

But it's not just market dynamics and technology advances that are driving the revamp at Openreach's optical services team -- as ever there's the threat of competition. While its physical network is limited in its geographical reach, Colt Technology Services Group Ltd has also been turning its attentions to a more customer-friendly range of service offerings, while Openreach is clearly concerned that Fujitsu Ltd. (Tokyo: 6702; London: FUJ; OTC: FJTSY) will get its U.K. fiber access plans off the ground and there are other service providers that are exploring the option of building their own fiber access networks, making use of Openreach's wholesale pole and duct offer. (See Fujitsu Unveils UK FTTH Plan.)

Most of all, though, Virgin Media Business Ltd. has thrown down the gauntlet with more aggressive marketing and a major U.K. mobile backhaul services contract announced in September. (See MBNL Backhauls With Virgin Media and UK Operators Opt for SyncE Backhaul.)

— Ray Le Maistre, International Managing Editor, Light Reading

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