MCLEAN, VA. (06/01/2000) - Nextlink Communications Inc. is expanding its network overseas with a US$306 million investment in dark fiber throughout Europe.
The company is buying local, intercity and transatlantic fiber-optic networks from Level 3 Communications Inc. Nextlink plans on using the capacity to expand the reach of its local and long-distance voice services, Web hosting and Internet access services based on its pending acquisition of ISP Concentric Network Corp.
"Buying dark fiber and building your own network is probably the most cost-effective way to expand overseas in the long run," says Melanie Posey, an analyst with International Data Corp. (IDC), a Framingham, Massachusetts, consulting firm. It's a good competitive move because Nextlink is among only a few U.S. competitive local exchange carriers (CLEC) that have a presence in Europe's local markets, Posey says.
The local dark fiber that Nextlink is buying from Level 3 includes facilities in Amsterdam, Brussels, Frankfurt, London and Paris. Nextlink's intercity fiber-optic network will link 21 European cities over 24 fiber strands that can support transmission speeds up to 19.2 terabits per second.
The dark fiber will be available later this year when Nextlink deploys network gear and fiber-optic electronics such as dense wave division multiplexing devices, which let service providers get the most bandwidth from fiber strands.
Nextlink plans on supporting commercial traffic over its European networks in the first half of 2001, says Mike Mecham, vice president of business development at Nextlink.
Level 3 is also supplying Nextlink with a 2.5G-bps transatlantic cable that will connect Nextlink's domestic network with its European network. In 2002, Nextlink is expected to boost the capacity on the transatlantic connection up to 10G-bps.
Nextlink already has its foot in the door overseas with its planned merger with Concentric. That ISP acquired the Internet Technology Group in the U.K. with customers and data centers in London and Amsterdam. Nextlink expects its merger with Concentric to close this month, according to Mecham.
Nextlink is somewhat familiar with Europe through Concentric, and it's also familiar with buying dark fiber through its previous relationship with Level 3.
Mecham says Nextlink was looking to mirror its domestic network deployment overseas, which is one of the reasons it teamed with Level 3. Since 1997 Nextlink has been working with Level 3 to build Internext, Nextlink's national intercity fiber-optic backbone. The Internext network should be finished next year and will connect 50 cities across North America.
While Nextlink is expanding its networks in Europe and Canada, Mecham says the company has a lot of work ahead as it plans to be an "integrated global service provider." And that's where Forstmann Little comes in.
Nextlink last month received a $400 million investment from the firm that Nextlink plans to use to fuel its network expansion plans. Asia, Eastern Europe, Australia and Central America are just a few areas where Nextlink still needs a network presence to offer integrated global services.