Hello everyone,
I hope the following Q&A will be of help to any other telecom "dummies"
that are out there (like myself). The questions are mine. The answers are
per Peter Jacques of DCI (UK) Limited.
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<< What is a "leased line"? >>
A lease line network is a method of sending long distance telephone calls
through specific private routes to any one town or country whereupon a
contract is entered into between that town or country's national telephone
company or other licensed carrier, in order to break out into the homes and
offices of the public.
<< Who owns these leased lines? >>
These leased lines are generally owned by large organizations such as AT&T,
British Telecom, MCI, Sprint, etc.
<< How much do leased lines cost and what is their capacity? >>
The costing of these lines is based on an annual rent and are usually
measured in 2Mb, however, many lines are smaller and progress from 64 kb.
For example, the cost of a 2Mb line between New York and London is approximately
$57,000 per month and this figure is amortized over that one year to cents
per minute and this will then depend upon the capacity that the line is capable
of supporting.
<< What is the availability of leased lines for a company entering the market
such as DCI? >>
Most of the larger organizations have substantial surplus space on these lines
and by leasing them to DCI, they recoup some of their money. One can lease a
line annually for as long as one wishes, although with the industry changing in
the way that it is, most companies in the telecommunications business review
every 6-9 months.
<< How many lines does DCI currently have? >>
DCI has the ability for capacity on 6 lines currently which are as follows:
London to Lisbon, Madrid, Barcelona, Copenhagen, Munich, and Prague.
<< For newly installed lines, does DCI UK physically lay them or do you pay
3rd parties to do it? >>
The laying of a cable costs many millions of dollars and the capacity within
these cables support the potential of many millions of minutes per month.
It is extremely unlikely, although not impossible that DCI UK will ever
be involved in the laying of such cables. The physical capital costs remain
with the larger telecom company who does the leasing.
<< With the European deregulation, will it work like here anybody can pick a
provider and have their service automatically changed at any time? >>
In order to reply to this point, I could probably fill 10-20 pages but
basically unlike the USA, the "United States of Europe" regrettably are not
as in tune with each other as they could be and the so called liberalization
and deregulation with commences 1st January 1998 will probably take at least
until the year 2005 for the majority of these countries to relinquish their
monopolistic rights. Today you can certainly pick several alternatives in
the UK, Germany, France, and parts of Scandinavia, but I am afraid at the
moment that is it.
<< I read where DCI will be using call directors. >>
Call directors are a very inexpensive least cost routing apparatus to enable
DCI to pretend as if we are an AT&T or MCI, but only as far the customer
is concerned, that is to say, when he dials his telephone number it goes
through the call director and that is where the routing takes place, so the
customer is not aware of any physical difference. Because we do not lay
cable, we use call directors as a means of effective expediency.
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- I thank Peter for providing this information. It does appear to
me that DCI is pursuing a cost-effective strategy by using the call directors
and not going overboard on installing long payback type infrastructure.
However, I believe DCI still needs financing of some sort to be able to install
or continue to install required hardware such as switches. I hope that the
rumored coming announcement by Joe Murphy at least partially addresses this
issue. I would also warn against expecting too much too soon from DCI UK with
what appears to be a pushback in the deregulation start date from this
summer to Jan. 1, 1998. I would rather the expectations be more modest than
those presented in the Corinthian Report.
Greg |
