SSE Lights Up Extra UK Capacity

Ray Le Maistre
News Analysis
Ray Le Maistre, Editor-in-Chief
11/27/2013



SSE Telecoms has established itself as the UK's number four network infrastructure operator, and a critical provider of network capacity to other communications service providers, with a network extension and upgrade that takes its owned infrastructure and points of presence closer to its customers. (See SSE Telecoms Expands UK Network .)

Having hidden its light under a bushel for a decade or so -- its last time in the spotlight was when it acquired Neosnetworks in 2003 -- the operator is investing in its network in a bid to double its revenues, currently running at £90 million (US$147 million) per annum from about 250 customers, within the next five years. (See Neos Acquired by Power Utility.)

It's also looking to make more of a name for itself in the enterprise sector. Everyone's heard of BT, Vodafone and Virgin Media, the top three UK infrastructure owners, but SSE Telecoms Ltd., part of British utility services giant SSE, is known currently as a wholesale provider of capacity to service providers such as TalkTalk and specialized users such as the education and research network JANET .

To build its business and become a bigger attraction in verticals such as finance, retail, and media (where it does already have some customers such as Thomson Reuters), SSE Telecoms is in the process of extending the reach of its network (fiber and microwave) to 13,700 kilometers (from 11.100 kilometers a year ago) and adding 54 new points of presence (POPs) to its existing 180 locations, a move that will take it deeper into metropolitan markets such as Bristol, Cardiff, Glasgow, London, and Liverpool (and many others). It is also hooking up to 20 more datacenters in addition to the 100 or so to which it is already connected.

"It's becoming increasingly important to get our POPs closer to our customers, within one or two kilometers," in order to provide the high-quality, high-capacity services increasingly in demand, says the operator's managing director, Chris Jagusz.

Those services come in the form of 1Gbit/s and 10Gbit/s point-to-point Ethernet and optical services, managed Ethernet (VPLS) and some "high availability Ethernet access" business, supported by Alcatel-Lucent (NYSE: ALU) 7750 service routers and Ciena Corp. (NYSE: CIEN) optical transport gear. (See Euronews: Ciena Lands 100G Deal in UK.)

The aim, says Jagusz, is to provide an ever more competitive set of services to service provider customers but, with the same set of support and features required by network operators, extend those offerings into key verticals such as finance, media, and law that need "very reliable services… it's all about keeping the lights on, so we have a very strong focus on testing and availability," he adds.

Such a move will take SSE Telecoms into direct competition with many of the companies that are its customers, in particular BT and Virgin Media Business. But Jagusz doesn't see that as an issue. "There's a lot of demand. It's a high growth market and there is plenty of business to go around," he states confidently.

Does that interest spread as far as the mobile backhaul market that is growing and which offers very substantial deals? It's not, says Jagusz, a major target but "we'll take some of that business if it comes our way. What we are seeing, in another part of the SSE group that manages access to street lighting on behalf of local authorities, is that the mobile operators are becoming very interested in how they can gain access" to that so-called street furniture. (See BT's Backhaul Barter.)

— Ray Le Maistre, Editor-in-Chief, Light Reading

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