France Télécom SA and Global One Communications Inc., its wholly owned Reston, Virginia-based subsidiary, announced plans Tuesday for a 15,000-mile (24,000 kilometers) transmission backbone network that will connect 28 major cities in the U.S. and Canada. The network will be connected to France Télécom's pan-European backbone network, which was opened in October of last year, the companies said.
In a conference call, officials from France Télécom and Global One provided details about the network, which is scheduled for completion by the end of 2001 and will have up to 1.6T bps (bits per second) of capacity to support Internet, data, voice and multimedia traffic.
One of the main reasons to invest in a North American backbone network is that the IP (Internet Protocol) traffic between the U.S. and Europe has grown, said Jean-Philippe Vanot, executive vice president, France Télécom long distance. "We need a very high quality and cost-effective backbone to route traffic from Europe," he said.
France Télécom is investing US$200 million in the network, said Detlef Spang, executive vice president for North America, Global One.
By having the network owned by France Télécom, there are two key advantages for Global One, Spang said. "Global One will now have its own cutting-edge network in the world's most important telecom market -- the U.S. and Canada. As a result, customers in the U.S. and Canada will have access to the industry's most innovative services on a cost-effective basis," he said.
This network will use DWDM (Dense Wavelength Division Multiplexing), to be provided by Alcatel SA, and SONET (Synchronous Optical Network), to be supplied by Nortel Networks Corp., for transmission. In addition, the companies are in negotiation with Level 3 Communications Inc. to provide the dark-fiber network, Spang said.
France Télécom and Global One have plans to route voice on the IP backbone and so far have bilateral routes existing with a good level of quality and cost, Vanot said. Sprint Corp. still will be used to carry traffic in the U.S., with a two-year time frame to replace the network that expires in 2002, he said.
"There is a lot of backbone existing in the U.S.," Spang said. "We want to control the transmission, to have it centralized," adding that those are some of the other reasons the company wants to invest in its own backbone.
The executives in the conference call hinted at other services besides the network.
"We're going into specific partnerships with ASPs (application service providers), building hosting centers in Miami, New York and Reston, Virginia ... to offer applications to the marketplace," Spang said.
During the question-and-answer portion of the call, Vanot said that Global One will keep its existing agreement with Intermedia Communications Inc. and will use it as one of its access providers in the U.S. [See "Global One, Intermedia Team for U.S. Service," June 13.]The challenge for the companies is that France Télécom "decided to have an aggressive time frame" in building out the backbone, Vanot said.
The France Télécom announcement follows a trend, said one industry analyst.
"Everybody wants a piece of the U.S. market," said Jeffrey Kagan, an Atlanta-based independent telecom industry analyst, in a telephone interview Tuesday. He cited Nippon Telegraph and Telephone Corp. (NTT), with its recent acquisition of U.S.-based Verio Inc., and British Telecommunications PLC, which is "also trying to figure out how to have a stronger presence ... It's part of a bigger trend."
Overseas companies want a presence in the U.S. because "U.S. companies are multinational, and U.S. consumers buy everything in sight," he said.
"On one hand, the weakness is that (France Télécom is) a new player with an untested network in the States and a weak brand name," Kagan said. "On the other hand, they can come in and create a state-of-the-art network and tout it as such, and they have to spend a lot of time and money building a brand here in the states and focusing narrowly" on their customer segment.
Regulation may also be a problem for France Télécom, Kagan said.
"It's uncomfortable for U.S. regulators to recognize we're going to have foreign ownership of U.S. companies," he said.
The new backbone network's POPs (points of presence) will be located in California in San Jose, San Francisco, San Luis Obispo, Los Angeles and San Diego; in Seattle; Salt Lake City; Phoenix; Denver; Dallas and Houston; Chicago; St. Louis, Missouri; Detroit; Atlanta; Cleveland; New York; Buffalo, New York; Philadelphia; Boston, Massachusetts; Oak Hill, Maryland; Washington, D.C.; Raleigh and Charlotte, North Carolina; Miami; and Toronto, Ontario and Montreal.
Global One, in Reston, Virginia, can be reached at +1-703-689-6010 or http://www.globalone.net/. France Télécom, in Paris, can be reached at +33-14-444-2222 or at http://www.francetelecom.com/.