Williams Communications
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.”
