RealTime IT News

Winstar Wins $98 Million Broadband Contract

Winstar Communications, Inc. Monday was awarded a multi-year $98 million contract from international data carrier Cignal Global Communications Inc.

As a part of the agreement, Winstar (WCII) will provide Cignal with a communications package that includes local and intercity end-to-end broadband capacity, high-speed Internet access, network design and equipment and Web hosting services.

Cignal plans to utilize services as a platform to rapidly build enhanced Internet Protocol and Asynchronous Transfer Mode services for its customers.

Additionally, Winstar and Cignal will jointly develop next-generation media distribution services for Web content players and Internet Service Providers on a global basis.

William J. Rouhana, Jr., Winstar chairman and chief executive officer, said the deal enhances the company's profitability while reducing their fixed costs.

"This is yet another in a series of multi-year large account transactions that fully utilize our network assets, thereby increasing revenue and yielding very high gross margins," Rouhana said. "This, in turn, helps us expand the amount of traffic on our network and spread the fixed costs associated with building our broadband network over a larger base."

Chris Rooney, Cignal chief executive officer, said the Winstar agreement would help Cignal expand services to new markets.

"Winstar's local provisioning ability and end-to-end connectivity accelerate our business plan to build an advanced global network quickly and enter new markets aggressively," Rooney said. "We are excited to be jointly developing next-generation enhanced services based on Cignal's cutting-edge integrated voice and data technology and Winstar's extensive network."

Cambridge, Mass.-based Cignal is an advanced global data carrier providing packetized voice, traditional data and Internet services.

Cignal provides advanced services to ISPs, application service providers and Web hosting firms in North America, Europe and Asia. The company is in the process of doubling its facilities-based telecommunications network from the 13 to 26 counties served by the end of next year. When Cignal's expansion plans are complete, the carrier will be able to provide access to over 85 percent of worldwide communications traffic.

Winstar is a broadband pioneer that provides businesses with local and long distance phone services and high-speed data and information access over wireless fiber connections. Winstar also provides broadband services in more than 30 U.S. markets over its own local networks in the 28 and 38 GHz spectrum.

In the past six months Winstar has leveraged its end-to-end broadband network to provide Internet infrastructure connectivity for high-tech companies including MindSpring Enterprises Inc. (MSPG) and AboveNet Communications Inc. (ABOV).