RealTime IT News

Williams Expanding While Others Contract

Williams Communications executives spent the past week getting ready to pick up where their competitors left off, starting with last week's global network services launch and continuing with the launch this week of their real-time billing service for providers.

The global fiber-optic bandwidth provider, which competes with some of the biggest names on the Internet names like UUNet , Sprint and AT&T has been expanding its business offerings despite the seeming contraction of the data carrier industry and the financial shaky ground the company finds itself.

Internet backbone providers experienced a less-than-stellar year in 2001, as the dot-bomb shakeup continued to rearrange the telco landscape and providers exited the playing field.

Cahner's In-stat, an online analysis firm, predicts a turnaround year for carriers (not in terms of revenues, which will remain flat) who provide essential services to service providers.

"The backbone market along with the total wholesale ISP market will experience little growth in 2002," he said. "The economy is affecting, not only the structure of the backbone provider market, but also the services they offer, and to whom they are offered."

William's executives think they have found part of the answer in their just-launched real-time data tracking service, which well-established Internet service providers (ISPs) and competitive local exchange carriers (CLECs) could find spells big savings on their next bandwidth contracts.

It's similar to existing "burstable" services, which lets providers buy in at a lower bandwidth requirement and pay for any spikes in bandwidth usage that might occur during the month. Spikes are caused by any number of reasons, from users going online at the same time to download the latest virus definitions or to check out a streaming media concert.

Using software/server technology developed by Narus and deployed throughout the network, Williams is able to track and account for nearly every data packet traveling on the network, something burstable tracking software is unable to provide.

The service isn't for everyone in William's client list, however. The aforementioned spikes can come back to haunt a service provider who doesn't have a firm grasp on the overall online activity of its user base and leave them with a bill that decimates their revenue sheet.

For carriers, the trend of international, billion dollar network builds are for the most part over and done. Most of the bandwidth needed in today's market is already in the ground and in today's market, there aren't many investors around who will sign off on costly construction.

According to Sue Forbes, Narus vice president of business development, there has been a shift in emphasis from previous years, making her company's product more essential than ever.

"The transition over the last few years, in terms of the economy, is from building up new pipes everywhere," she said. "The reality now is understanding how those pipes already there can increase the (carrier's) profitability."

William's new bandwidth manager enhances existing burstable services by providing real-time billing to its customers, something not many other carriers can claim to offer. Usually tracking every data packet with a 95 percent reliability rate using burstable services, the new service guarantees 99.9 percent tracking rate and allows Williams to upgrade their service level agreements (SLAs) and provide the service.

Mark Bender, Williams chief information officer, said in today's market carriers need to offer a solution that fits specific customer needs.

"We already offer flat, tiered, and burstable billing options," he said. "With the addition of usage-based billing, Williams Communications' customers can have the option to pay only for the amount of bandwidth they consume. Given today's challenging market conditions, we believe it's important to offer this flexibility for customers looking to reign in their bandwidth expense."

The service comes on the heels of its announcement last week it would offer asynchronous transfer mode (ATM) and frame relay services on its global network, which services more than 20 countries in Europe and Asia.

Williams has spent the past several months expanding its advanced data services at a time when many of its competitors are scaling back operations worldwide and trying to rein in costs. With the collapse of the Internet bubble last year, there has been a glut in bandwidth (especially in North America), forcing many carriers to rethink their global expansion plans.

Executives at Global Crossing , a William's competitor, tried to get its shareholders to sign off on a purchase of one of its former subsidiaries, Asia Global Crossing , in November 2001. The move would have consolidated operations for the carrier, potentially saving millions.

Shareholders nixed the deal, citing "current market conditions," and officials on both sides backed off the deal.

While mainstay carriers like AT&T, Sprint, UUNet and the like (with their worldwide name recognition clout) don't have the level of problems experienced by these upstart carriers, the pinch is felt by everyone. AT&T has been feverishly selling off components of their business (AT&T Broadband, for example) to rein in costs in this depressed market.

Williams has been experiencing financial pains of their own lately, enough for Standard & Poor to downgrade William's debt rating last week. The news dropped William's stock value 12 percent, though the company rebounded days later and more than recouped their share value.

The news forced Howard Janzen, William's chairman and chief executive officer, to send a letter to reassure jittery investors. He claimed the downgrade would't stop his company from continuing to deliver a quality product and look for new opportunities, like global service enhancements and real-time billing.

"With every challenge comes opportunity," he said. "Our success will not be impacted by S&P's downgrade and, as such, we will prove wrong those who doubt both Williams Communications and our industry."