After Getting the best from regional telecom suppliers, we look at Getting the best from international connectivity.
International businesses, by definition, operate across geographical and political borders. Working beyond national borders requires companies to make telecom supplier agreements, potentially involving the connection of multi-national networks. So where do companies go for information and ‘unbiased’ support in order to best address their telecommunications requirements?
Here are some key factors a telecom professional would consider when approaching this market, specifically from a Swiss perspective.
A common trait
As with local and regional telecom solutions, there is a tendency for company IT departments to choose well-known local suppliers (regional or national). Looking to keep negotiations, expenditure and billing close to where the budgetary decisions are made, they choose ‘home’ suppliers who are often also the former national supplier. Quite often, it can be just a comfortable decision to use familiar suppliers who share a business culture and speak the same language.
Suppliers on the market
Typical examples of ‘home’ providers includes BT in the UK, Swisscom in Switzerland and Verizon in the US. The natural direction can be to use these same suppliers for global solutions, even though they may not have the best placed networks (design and price) for every route.
Working with ‘home’ suppliers can ease concerns relating to contract management and administrative processes, but it can also lead to missing potential opportunities of finding similar but cheaper or more technically-suitable solutions on the market. This may result in unnecessary spending and less efficient design solutions.
International network services are not just offered by incumbent (national) operators, which may have their own international footprints. Every national player historically managed agreements with other national companies (incumbents or otherwise) as part of setting up the original international voice network. These agreements have evolved into global data connectivity contracts, but a revolution in growth of international operators/carriers has resulted in multi-national connectivity partnerships which go well beyond the ‘old boys’ network.
Connectivity beyond the incumbents
There are more internationally-focused telecom companies on the market that specialize in providing Carrier and Internet access Services, carrying their own direct customers and other operator’s data traffic between and inside country boundaries. They concentrate on being present in multiple countries, datacenters and Internet Exchanges points (national or regional peering locations) across the globe, making them key players for international connectivity.
The building of international ‘backbone’ fibre networks exploded at the end of the 90’s and into the noughties, introducing carrier company names now familiar on the European telecom wholesale market. The list has grown to include, Interoute, Level3, T-Systems, euNetworks, KPN International, BICS, PCCW, NTT, Verizon, GTT, Zayo…the list goes on... Each has its own strengths and weaknesses regarding network reach and geographical presence. Company names may change, but the cable networks remain. Most are unheard of by non-telco businesses.
Along with international supplier growth, a similar pattern applies to the smaller ‘mini telcos’ that are evolving. Usually based ‘in country’ offering regional services, some have international reach. They offer many key services in direct competition with incumbents and others, such as IP Transit (internet access), Point to Point & Multipoint connections, and colocation. Two examples of higher profile ‘mini’ players in Switzerland are INIT7 AG (Zurich based) and IP-Max SA (Geneva based), who are able to access the same key Internet Exchange points as the big international players.
An open market
Huge investments in national and international fibre networks have improved connectivity options between key cities and major telecom Interconnect and Internet Exchanges across the globe. This aligns with the legislative opening of telecom markets, previously dominated by incumbent suppliers. In turn, incumbents, competitor suppliers and end customers alike now have the opportunity to ‘shop elsewhere’ for their connections, locally and internationally.
Joint agreements
‘Old world’ connectivity agreements created by incumbents and a handful of international players have been overtaken by multiple combinations of joint ventures. Some incumbents have ‘partner’ agreements with specific international carriers, where these carriers provide international connectivity solutions outside of the incumbent’s own national network on their behalf.
Carriers create long-distance paths, connecting key datacenter locations and using their own international backbone networks. These are offered to incumbents and others in order to extend their national platform reach. Carriers assume the role of dealing with local suppliers at the remote end of a desired routing, to complete an overall solution. An example is where Swiss national operator, Swisscom, works closely with US owned Verizon, and Belgacom International Carrier Services (BICS), amongst others, for its international reach. These companies, in turn, rely on Swisscom for National access connections in Switzerland.
Shared networks solutions are pretty much standard business across the globe. It can be assumed that almost no company has complete international solutions available on its owned infrastructure. This is especially relevant where ‘remote end’ local access (connecting the ‘last mile’) is required.
A few suppliers like City of London Telecom (Colt) purposely did build fibre routes (constructed in the boom years) which connect some of its key financial market customers (city networks) directly into its European backbone, but even they no longer have the budgets to build everywhere. Local cable and bandwidth suppliers are used instead.
So, with an open market comes a wide variation in connection solutions available across the globe. Most service providers have the ability to make wholesale deals with other players, so an Incumbent or other service provider can design customer-specific solutions, with some relying on dedicated international partners, and others using different players for each route design. Comparing routings and pricing can be a very rewarding exercise for companies looking to get the best (quality and price) deals on offer.
Best solutions?
Connectivity options between two international locations can vary dramatically, in design and price, depending on the supplier. An example of one route between a datacenter in London and another in Geneva could be designed using fibre networks via Amsterdam, Frankfurt and Zurich, a recognized major data highway. Another option could go directly through France, via Paris and Lyon.
One service provider might be able to offer both solutions (diverse networks) between the cities, directly on its own network, another not. It should be noted that the better quality routes may attract premium pricing. In some cases, suppliers offer their most direct paths to ‘speed hungry’ customers (financial trading and gaming services) as a premium service. However, that is not always the case, depending on the competition on the same routes.
Route distance is an overriding factor affecting network efficiency, along with the quality of any physical connections (splices or connectors) made along the route. Efficiency of a network’s transmission is determined by measuring its ‘Latency’, or the time it takes to send and receive back a transmitted data packet between locations (called Return Trip Delay, which is measured in milliseconds) so the shortest route with least number of connections normally provides the best performance solutions.
Leasing international routes can prove quite expensive, especially when they are dependent on multiple suppliers joining networks in order to complete a full route design. Each supplier wants its profit margin and has to play the game of percentages, whilst still attempting to respond to a competitive market. Therefore, the resultant price may be prohibitive for some customers, when combined with installation and rental fees.
Generally speaking, the more a total route is directly owned by one provider, the more likely pricing will have flexibility for the customer. When choosing a supplier, it can be difficult to find out who has what network. However, it is a question worth asking, as it may help to understand why pricing is as stated. A multi-player solution could still be shorter and less expensive, so nothing should be taken for granted.
Finally, smaller, less known operators can prove their worth in offering a more flexible approach to customers. They may be more willing to negotiate one-off deals with particular suppliers that bring in the best pricing for particular routes or services. This ‘shopping around’ can result in finding a better physical design of network (including lower latency). It can also make sense to consider projects case by case, and not to be tied to any one network provider. They can still benefit from industry standard service level agreements, supported by the big operators and local suppliers involved.
Companies should also think about making best use of diverse supplier backbones, to build cost effective and more efficient networks (consider dual-supplier redundancy benefits).
In summary...
The point is that there is still a lot of available network capacity out there, and new business is hunted strongly across the supplier market. Getting a good deal is all about using knowledge of the market and driving informed negotiations.
Decisions are made based on meeting customer objectives on design and cost, but also on feeling comfortable and confident with the services offered. Companies have the choice to use one supplier for all their needs, or to be a bit more adventurous about using services that may potentially be a ‘better fit’ offered by alternative local or international players. It certainly pays to be aware of the options.
Next: Choosing the best datacenter service supplier for your business
