SERIES Part 2: How to find the right telecom and data management solutions for a growing business

Our first article in this series focuses on Getting the best from regional telecom suppliers.

Are there bargains out there for companies looking for quality telecom connectivity and support services? How do they find out about options available?

The number of telecom service suppliers present in any local market is something most businesses do not think to consider. However, when these businesses go looking for advice and support regarding available telecom products and network services, they need to figure out where to get informed and unbiased information.

To begin with, a company needs to consider the options a telecom professional would address. Here we will take a closer look based on the Swiss market.

How much will it cost?

Unfortunately, a ‘go-to’ Which Telco comparison magazine does not exist. Each telecom supplier markets itself separately, and it is an aggressive market. Some may claim that on-line bidding sites are available, but these tend to be used for more lucrative international services. They cannot really help in finding services for local businesses just setting up or looking to expand.

There are two main ways to obtain current local information: one is to do some homework, which could be an option if a company has the time and competence. The second would be to get someone experienced in the market to advise and provide support. Up-front time spent on finding multiple supplier options does pay off. Letting suppliers know they are competing with others gets them to work harder to win business.

Well-known suppliers

The most obvious place to start would be with national fixed-line players, made up from incumbent operators (legacy state telephony companies), Cable TV network companies, and maybe a second or third voice supplier which appeared with the opening of the telecom market. In Switzerland, this means Swisscom, UPC Cablecom and Sunrise, respectively.

Many Swiss utility companies have fibre networks in metropolitan areas like Geneva, Zurich, Basel, Bern and more. They also install more recent Fibre-to-the-Home (FTTH) networks. One thing that many companies do not know is that often times, alternative suppliers can also access customers over these networks.

A couple of examples: Gas&Com is a multi-regional provider, with fibre cables laid alongside its national gas pipelines, and SBB/CFF, the national railway system, also has fibre laid alongside its rails that are used by other suppliers.

Local suppliers

Current telecom legislation encourages competition across telecom markets. This has resulted in the evolution of many new ‘mini telco’ ventures, which aim to benefit from open network access in the major cities and key geographical regions. These ‘mini telcos’ act as ‘alternative’ service suppliers to the bigger players, specializing in specific areas of the telecom market.

These ‘newer’ suppliers are often described as Internet Service Providers (ISPs), because their key business is based around providing dedicated internet access to local audiences (residential and business). They also manage their own networks, creating Internet Protocol (IP) platforms, transmitting customer data, and offering private, secure data transmission, with Ethernet based solutions and the latest fibre technology.

ISPs are network design and platform management specialists that tend to be initially regionally-focused, like Cyberlink AG or Computerline in Zurich and DFI in Geneva or netplus.ch in the French-speaking part. Some can be multi-regional, like VTX, operating in both German and French speaking areas of the country.

There are, however, ISPs which focus on a wider, global approach to business. Companies like INIT7 AG in Zurich and IP-Max SA in Geneva purposely extend their operational footprints outside Swiss national borders in order to satisfy a wider range of international solutions for the Swiss market and beyond, becoming a type of carrier services competitor. They also offer their own extensive IP networks to support smaller ISP’s located in Switzerland.

Check them out

An excellent resource, when considering Internet supplier alternatives is this website managed by Hurricane Electric (a US-based international ISP). It presents current information on the Swiss IP connectivity market (and beyond): www.bgp.he.net/country/CH. This publicly-available tool allows anyone to see how Swiss-registered internet suppliers compare to each other and how they manage multi-network peering and connectivity on their own service platforms.

Building access options

Companies can easily be swayed to use the supplier that ‘owns the cable’ already located in their building. They should, however, be aware that most access networks are also available to competitors in the market. These competitors can usually get wholesale pricing from the cable owners, which allows them to compete against the same owners in an open market on a range of key products. These products may be very attractively priced, despite the supplier access overheads and depending on the solutions and package of services involved.

Some companies may ‘politically’ decide to work solely with the national operator, as a show of loyalty to the Swiss brand, but most will have budget driven reasons to look around. Investigating alternative options that could potentially equal or better those on offer from the incumbent and may result in surprising savings, especially regarding initial capital outlay and ongoing operational charges.

Equipment used by the new telecom players tends to be state of the art. They operate in direct competition with the national players, offering diverse products, such as point-to-point connections, internet access, colocation (hosting services), Voice over Internet Protocol (VoIP) and TV services, providing ‘locally’ focused services. Some are more adventurous, and can readily address and operate within European markets and beyond.

ISP networks tend to be designed around core network equipment being placed in well-connected datacenter (hosting) sites. This allows them to offer colocation services (equipment and data storage) and to provide local, national and international connectivity services to their customers. Some ISPs have resell agreements with key equipment manufacturers (Cisco, HP, etc.) providing an ‘overall’ solution to companies which can be a very attractive option (a one stop shop).

A few local ISPs invest in and manage their own fibre networks. However, many more depend on making wholesale (discounted) leasing agreements with existing infrastructure owners, including incumbents and utilities, and creating their own purpose-built networks overlaid on multiple-owner infrastructures.

Considering flexibility

Leasing network and bandwidth from multiple owners allows flexible design. Cable owner agreements with other suppliers (e.g., 24h/7 response and repair) can in turn be mirrored in the suppliers’ own customer-facing agreements. This ‘wholesale’ leasing model is a recognized world standard business model for areas where operators do not have their own infrastructure. It is how the telecom world does business.

ISPs are less encumbered with getting returns on existing cable investment, as they do not normally install their own backbone cables. They have no commitment to using their own fixed infrastructure, they build to suit demand. This allows re-active design rather than being stuck with a risky upfront ‘if you build it, they will come’ approach. The cable owners have no option but to manage and maintain fixed geographical services, but their wholesale customers can come and go in order to meet their own customers’ demands.

Some words of advice on choosing a regional supplier

Companies should verify if their current and future telecom requirements can be fully supported by its potential or existing suppliers, be it the National Operator, Local Operator or Swiss-based, international market ISP. It is also important to consider finding cost effective alternatives to the players with the bigger advertising budgets. Keeping things local may meet a particular company’s working style and marketing strategy but it pays to look around for competitive options.

In summary, if a company is serious about getting the best design, assured quality and ongoing value for money, it should do its homework. Persuade suitable suppliers (large or small) to describe and offer their best solutions. Let them know they are competing for the business. Ask them questions about their abilities to support the company’s current and future connectivity strategies.

Consider creating a Request for Proposal (RFP) document, commonly used in many types of bidding processes, to be answered by all contenders. This helps structure and evaluate the decision process and keeps the suppliers focused on meeting identified requirements (being creative) and competitive pricing.

Finally, we should not forget that telecom providers are like other product suppliers. To be seriously considered in the market, they need to be focused on customers’ real needs and the competition in the market. For the customer, it is not always about the shiny marketing and promises suppliers make before a sale, it is also about the ongoing support and quality of services they provide, locally based or nationally centralized.

Next: Getting the best from international connectivity.

Image credits: geralt via Pixabay, CC0 Public Domain License

Dave Dugdale via Flickr, www.learningVideo.com

janeb13 via Pixabay, CC0 Public Domain License