Yesterday, Verizon (NYSE:VZ, news, filings) announced further developments in its Verizon Business division’s international expansion. Their Pacific mesh network, begun in 2007, has been completed after the final extension to Singapore. The seven way mesh across the Pacific, which uses capacity on the new Trans Pacific Express cable as well as many others, is designed to seamlessly reroute traffic on cable cuts with greater reliability than before. In parallel, a dozen new Private IP nodes were opened and ethernet access was extended to another dozen nodes.
There was a time when the MCI/Worldcom international backbone was the pride of telecom. Their fiber stretched everywhere, they were part of dozens of cable consortiums, and their bandwidth commanded a premium. That all came crashing down with the rest of the company around Bernie Ebber’s ears, and the international component shared plenty of blame in the financial shenanigans. Its reputation tarnished, its profile lowered, and its capital investment slashed, it then became part of Verizon, a company that until then had never much cared what happened outside of its home RBOC turf.
I wondered at the time if Verizon would ever really take up the mantle. Deep down in its RBOC soul did it really care about an international network? Or would they run it because they have it, but as an afterthought? Well, it hasn’t been the fastest recovery in history, and I suppose that the depths of the crash made that necessary. However, the Verizon Business network does seem to be aiming to reclaim its former glory, at least they are certainly putting substantial cash behind the rebuilding of it. And they are doing it at a time when everyone else is hiding money under mattresses, so they are perhaps catching up.
Will they make it? Are they already there?
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Categories: ILECs, PTTs · Internet Backbones
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The RBOC soul doesn’t really care much about the International side. The real money is made in the divisions other than Business and buying MCI was a knee jerk response to the SBC juggernaut. This whole expansion at the peak and watching it sit empty in the bust kind of reminds us of what one of the reasons that Worldcom was in trouble to begin with. It would appear that a lack of austerity is still pronounced within the minds of VZ Business, then and now.
And yet, the cash just keeps flowing. At AT&T also of course.
Ihab Tarazi (VzB, Networks) has a clear vision of the international network he wants to build, has the power within the company to achieve it, and is well on the way to doing so. VzB will soon have a fully global and near-seamless ring of upgradeable and IP-capable pipes. It’s the same vision that a handful of other truly global (or truly aspirant) carriers (plus Google) are doing. As with all carriers they have one or two weak patches, but their vision is good and the VzB brand is so powerful.
Tarazi is definitely trying to build a cable empire and as Anonymouse mentions, has the power within to do it. Incredibly no one within Verizon questions his approach or the incredible spend Verizon will incur as a result, despite near flat revenues from their business customers in 08. Verizon are still going after the hly grail of the ‘global, end to end’ play, but havent caught on that increasingly, enterprise customers have realised that going global dosen’t necessarily give them the best deal and its hard to break apart once in place. A region by region play is much more effective in terms of creating and maintaining competitive supplier tension, leveraging regional supplier presence, regional supplier pricing as well offering the customers regional oversight and governance. It also means that breaking up isnt hard to do.
Eloquently put, AnonImouse, that’s something to think about versus the bigger is better mindset out there these days.