Business internet

Ethernet Competition Warming Up Globally In 2009

Traditionally high speed fibre links have been expensive because often the fibre had to be physically run for long distances, normally back to a connection in one of the dense metropolitan areas, and often all the way to London. The need for repeater stations adds to this cost.

In the UK the model has changed. Now network providers are rolling out Points Of Presence locally around the country with a preinstalled backhaul to London. It normally has to be London because typically this is where connections to other carriers and the internet are located.

This means that now, instead of long connections with high installation costs businesses can install lower cost local fibre connections, provided they are within 25km of an enabled POP.

From my perspective there are two main players in this game.

BT Openreach will, by April, have 600 Ethernet enabled 21CN exchanges and notionally 1,100 by the end of the year. BT is however playing catchup with NTL which owns most of the UK’s cable TV infrastructure. NTL some time ago woke up to the fact that it wasn’t using this existing fibre in the ground to best effect and is now selling leased line connectivity at much lower costs than was available even last summer. 

If you don’t understand the relevance of this, fibre connections are far more reliable than ADSL and come with better Service Level Assurances. As companies rely more and more on web based hosted services and applications they need better service uptimes.

The competition is great and is very much to the benefit of UK business. I am now quite often seeing zero up front cost quotations go out the door which is likely to prove a great help to businesses struggling to find capex in the recession.

PS the Global Warming bits in the post title was purely an attention getter 🙂 . Actually I don’t really mean “globally”, I mean in the UK and although there are some countries ahead of us in this game in Europe and the Far East there are others, notably the USA that lag behind.

We are still a long way from getting fibre to the home but the environment for businesses is definately improving.

broadband Business

Leased Line Business on the Up

Despite the advent of faster (ish) broadband the demand for leased lines is on the up. At least that is a trend we are seeing at Timico. This is evidenced by the statistic that in one day last week we received 32 (that’s thirty two) requests to quote for a leased line from our existing customer base.

You might argue that 32 quotes from a base of ten thousand or so businesses is not much but I’m telling you it is. That is the annualised equivalent of 8,320 leased lines in one working year, assuming no one takes a holiday but doesn’t work weekends.

Now we don’t get that number of RFQs every day, it would be great if we did. Also this is a recent statistic so they will not yet all have turned into orders although I’m sure that a significant proportion will do so.

It does point to a growing demand though. Businesses’ need for stable higher bandwidth is on the up as they have more and more internet (or at least Internet Protocol running on private networks) based communications that they rely on. With the best will in the world broadband (ADSL) is not going to give the same degree of reilability as a leased line, but there again it is significantly cheaper.

One huge opportunity for TImico is the massive installed base of BT leased lines. I read somewhere recently that this amounted to around 118,000 installations. Most of these leased lines will likely be 2Mbps connections that have been installed for donkeys years and are now well out of contract.

You can bet your bottom dollar that BT will not have mentioned that IP bandwidth costs have plummeted in the same timeframe. The chances are the typical BT leased line customer is still paying the same for the service that he or she was five years ago. This represents a serious opportunity for fast growing outfits like Timico.

If anyone out there needs advice on their leased line needs just drop me  line or leave a comment and I’ll sort out an independant assessment.