France Telecom Buys Into American Dream
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France Telecom, the oft-rumored buyers of troubled U.S. carriers, Wednesday struck out on its own with the purchase of dark fiber in eight major U.S. markets through its subsidiary Global One.
The deal gives France Telecom dark fiber metro rings owned by Metromedia Fiber Network Inc. The company will add networking equipment -- like routers and switches -- and package them with business services in the growing market for broadband services.
Dark fiber is the unlit (unused) fiber optic lines criss-crossing the country, already buried in the ground by backbone companies. MFN specializes in metro fiber rings, which surround and permeate a city and its surrounding suburbs.
Global One executives were unavailable for comment on the announcement, so it's uncertain how much the fiber was leased for and who will provide the networking equipment for the ring.
With its lease, France Telecom can provide nearly unlimited bandwidth and bundled services to its enterprise customers, including virtual private networking, video conferencing and streaming media, at a fraction of the cost of installing the fiber themselves.
"With our all-optical network, MFN is enabling communications carriers to enter new markets faster, without incurring the significant capital costs associated with building their own network," said Nick Tanzi, MFN president and chief executive officer.
The lease gives France Telecom dark fiber rings in Atlanta, Boston, Chicago, Dallas, Houston, Los Angeles, Seattle and Washington, D.C. These cities all have businesses that need a large amount of dedicated bandwidth, telecommuters for example.
As more and more people start working from home, these businesses are going to look for a provider who can keep far-flung employees under one roof, so to speak, for a premium price.
Kneko Burney, director of e-business infrastructure for Cahner's Instat, said there will be nearly 40 million telecommuters by 2004.
"These employees are prime candidates to access remote corporate systems through VPN connections, use Internet-delivered business services and are most susceptible to crippling IT issues while at home," Burney said. As a result, these users are the best targets for high-end residential broadband access and may prove to be an excellent vehilce through which to offer value-added services to corporate customers."
France Telecom has long been rumored a potential buyer of Sprint Corp., after Sprint's failed $120 billion merger with Worldcom in July of 2000.
It would have been a particularly attractive deal for the French telco, as it would have made them one of the top three long-distance companies in the U.S. That, and Sprint's nationwide wireless network would have been a good fit for the foreign outfit, which is Europe's second-largest mobile operator.