WAN Services /

C&W hangs up on its voice, frame and ATM customers

Company will focus on hosting, IP and CDN services.

By Michael Martin
Network World, 06/24/02

Cable & Wireless is getting ready to exit the domestic voice, frame relay and ATM markets but hopes to minimize customer inconvenience by selling its user base to other service providers.

Most of the customers C&W is shopping around are small- to midsize businesses, says C&W spokesman Chad Couser. C&W will continue to serve large business customers with global operations who have voice and data needs in the U.S.

Some customers who don't generate a profit for C&W won't be included in the sale. C&W has notified those customers that they will have until the late summer or early fall to find another service provider.

C&W had a significant number of voice, frame and ATM customers in North America, says Russ McGuire, chief strategy officer for telecom consultancy TeleChoice. But C&W never approached the market share of providers such as WorldCom, AT&T and Sprint, he says.

"They certainly struggled in North America," he says.

One reason it didn't succeed in that market may have been that WorldCom, Sprint and AT&T have rich service portfolios for business customers, McGuire says.

"They have multiple kinds of [VPNs]," he says. "They have IP-enabled frame, frame VPNs, frame and ATM internetworking. C&W had some of that, but they didn't have everything the others seemed to have."

C&W isn't leaving the North American market altogether. The company will continue to offer hosting and IP services. C&W has boosted both these business areas through acquisitions over the past four years.

The company's exit from the voice, frame and ATM markets came as little surprise. Company officials had said the company might be leaving those businesses when it held its year-end review for 2001. The provider will continue to offer international voice and frame services.

While C&W didn't have much success in these markets, McGuire says he thinks the company may be successful with its hosting operations.

C&W has a Tier 1 North American IP backbone and 46 hosting centers across the U.S. and worldwide. The provider also operates a content delivery network it acquired when it purchased Digital Island last year.

"They've picked up some interesting assets and have some strong customers," McGuire says.

"In the hosting space, it's not so much a question of your portfolio as it is pricing and how well connected your network is," he says.

C&W also is in an enviable financial position when compared with most of its competitors in the hosting market. While many providers are struggling under mountains of debt with no relief in sight, C&W has almost $4 billion in the bank.

Some of C&W's money is going toward building a private international IP network that the company will use to launch IP VPN services for enterprise customers this year.