NEW YORK – Rogers Communications wants to team up with U.S. cable companies to serve more large enterprise firms that have facilities spread throughout the North American continent.
Andy Striegler, vice-president of carrier services for Rogers Business Solutions (RBS), made the pitch to his MSO colleagues at an industry conference in New York late last week. Speaking at Light Reading’s Future of Cable Business Services event, he urged U.S. cable providers to link their networks and develop their wholesale businesses so they can compete with incumbent telcos and competitive local exchange carriers (CLECs) for large commercial prospects.
“Moving from servicing small businesses to ‘large locals’ to ‘large regionals’ will drive the need for a wholesale model,” Striegler said. “You have to have the scale and understand the value proposition.”
In his keynote address, Striegler argued that cable operators have forfeited too much of the lucrative enterprise market to incumbent and competitive telcos. Unlike most MSOs, he said, the telcos have been interconnecting their networks for years and have developed standards and business processes for doing so. So now, he contended, it’s time for cable providers to catch up by making physical network-to-network interconnections (NNIs), striking business agreements and integrating business processes.
In particular, Striegler is looking for the cable industry to come up with its own approach to interconnecting networks so that it can serve the many larger businesses that require out-of-region connections. He appealed to the cable players to forge such interconnection agreements with Rogers to the mutual benefit of both sides. “Moving up-market, we get into enterprises such as banks with services across the country,” he said. “We have to address issues of network coverage, and the fact we don't have that coverage everywhere they want to go."
Further, Striegler urged cable operators to link up their networks in a way that provides end-to-end visibility and offers quality-of-service that meets customer needs. "It's all about customer experience – how do we make sure you are going to look after our customer out-of-territory the way we want you to?" he said.
Striegler argued that cable operators could capture a bigger chunk of the US$140 billion business revenue pie – he claimed as much as $100 billion would be addressable – if they struck more deals for interconnecting networks and selling wholesale services to each other. He noted that Rogers, which entered the wholesale market several years ago to pursue medium-sized and larger businesses, now reaps about $100 million a year from its wholesale activities.
“We’re in wholesale to support the growth of our enterprise business,” he said. “We’re focused on the medium and large sized companies.” He noted that RBS has “learned quite a bit” from working with companies like Shaw Communications. "We have gone from 17 Gig-E interconnects to more than 60,” he said.
The RBS proposal received somewhat mixed reviews from three companies that addressed cable's enterprise market prospects in a panel that followed Striegler’s speech. Darren Wolner, director of data product management for Time Warner Cable, noted that his company is getting more aggressive about selling Carrier Ethernet services both on-net and off-net. However, he termed Striegler's idea "something that we aspire to," but aren't likely to carry out for some time.
Will Jones, a partner in the MainSpring 360 consulting firm, predicted that cable companies will move toward interconnection more quickly once they start pursuing more enterprise firms. He also predicted that MSOs will adopt the interconnection approach when they "realize what deals they are losing" because they can’t quickly and easily serve locations outside their wired territories.
Daniel Lowe, VP and GM for EdgeConneX, an infrastructure-as-a-service firm backed by Comcast Ventures, agreed that cable operators need to improve the network interconnection process. But he views such execution as "challenging" and warned of possible antitrust issues if MSOs try to team up.
– Cartt.ca staff
