Tata Communications Steps Up Competition with New Global Dedicated Ethernet Services

| Aug 4, 2008 | Telecom Services - Asia | Competitive Intelligence Report

| Analyst: Siow Meng Soh

Current Perspective: Positive
Vendor Importance: Moderate
Market Impact: Moderate

Event Summary

July 31, 2008 – Tata Communications has announced the addition of two new Ethernet services to its global Ethernet portfolio – Dedicated Point-to-Multipoint Ethernet and Dedicated Multipoint Ethernet. Tata’s global Ethernet services are available in India as well as major business centers in Asia, North America, Europe, Africa, and soon, the Middle East. Tata’s new Ethernet services are MEF 9 and MEF 14 certified and they offer dedicated bandwidth, MAC address forwarding and CPE-CPE SLAs.

Analytical Summary

• Current Perspective: Positive on Tata Communications enhancing its global Ethernet services portfolio by adding two new Ethernet options – Dedicated Point-to-Multipoint Ethernet and Dedicated Multipoint Ethernet. Few carriers offer international Ethernet services (in multiple cities in Asia, Europe and North America) and Tata Communications can use its wide range of E-Line and E-LAN services to differentiate against competitors.

• Vendor Importance: Moderate to Tata Communications because the demand for carrier Ethernet services is growing, and this is an area where Tata Communications can create an impact since other global carriers have not been aggressive in rolling out their Ethernet services globally. Tata has been offering long haul Ethernet services since 2006, and this announcement is a result of the company’s on-going product development.

• Market Impact: Moderate on the pan-Asian telecom services market because competitors in the region (e.g., NTT, SingTel and Telstra) already offer long haul point-to-point and multipoint-to-multipoint Ethernet services in several countries. While Tata Communications offers a wider range of long haul Ethernet services than global carriers such as AT&T, BT and Orange Business Services, it lacks a strong presence in their home regions of North America and Western Europe, and the strong branding that these global carriers have in their respective home regions.

Recommended Competitor Actions

• Carriers such as BT Global Services, Cable & Wireless and Orange Business Services should consider offering long haul switched Ethernet services to customers in Asia-Pacific. As more MNCs in Europe and the US adopt Layer 2 Ethernet services, they would expect to connect their sites in Asia using the platform. Verizon Business targets to deploy Ethernet VPLS in Asia only in 2009 and it should consider doing it earlier.

• AT&T can highlight that it is currently deploying OPT-E-WAN (Ethernet VPLS) in the US and in 14 countries internationally – including China (Hong Kong), Sydney, Singapore and Tokyo within Asia. AT&T needs to highlight that the deployment of OPT-E-WAN in Asia is on track and will be ready by year-end 2008. The carrier should point out that it has already been offering switched Ethernet (OPT-E-MAN) in the U.S. for several years, long before Tata Communications.

• SingTel needs to highlight that its ConnectPlus Ethernet Line and Ethernet VPN offer customer point-to-point and any-to-any configuration respectively. SingTel can also point out that its Ethernet services are available in more places in Asia-Pacific than Tata Communications. SingTel’s Ethernet services are now available in 38 cities in 16 countries in Asia-Pacific, Europe and the U.S.

• Asian carriers such as HGC, PCCW, NTT and Telstra should point out that they have rolled out international Ethernet services to several cities in Asia much earlier than Tata Communications. These carriers should consider expanding their Ethernet coverage through partnership. HGC can also point out that it has been able to extend its coverage through several partnerships (e.g., StarHub for Singapore and Broadwing for the U.S.).

Recommended End User / Customer Actions

• Customers looking for international Ethernet services should evaluate Tata Communications’ Ethernet services portfolio comprising Priority Ethernet (Ethernet over MPLS) and Dedicated Ethernet (Ethernet over SDH, and MEF 9 and 14 certified Layer 2 Ethernet). Tata Communications offers various Ethernet options and strong SLAs.

• India-based enterprises should consider Tata Communications Ethernet offerings. Not only does the carrier have good Ethernet reach within India (including many Tier 2 and Tier 3 cities), its Ethernet services are also available in key cities in Asia, Europe and North America.

• Customers should be aware that there are other carriers in Asia offering international Ethernet services. They should also evaluate Ethernet services offered by carriers such as HGC, NTT, PCCW, SingTel and Telstra. Each carrier offers different Ethernet services in terms of coverage, services, features and SLAs, and customers should evaluate vendors based on these criteria to make their choice.

CLIENTS ONLY

Current Perspective

Competitive Positives and Concerns

Recommended Vendor Actions

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