[GTE's data network a big draw for Bell Atlantic]
NEW YORK, July 28 (Reuters) - One of the great attractions for Bell Atlantic Corp. in buying GTE Corp. is the opportunity to get its hands on one of the up-and-coming major players in the fast-growing data transmission market.
By early next year, GTE expects to have in place a 17,000 mile network of fiber optic cable that will serve as the backbone for virtually all of its future data business.
The network will be capable of carrying traffic ranging from traditional voice telephone and fax services to Internet traffic and huge chunks of data traveling between corporate computers.
"It creates a powerhouse data company," GTE spokesman Bill Kula said. "That's where GTE opened a new chapter in its book last year."
A year ago, GTE embarked on a mission to become a major presence in the data transmission market, considered by most in the industry to be the path for future growth. It bought BBN, a Massachusetts Internet and data company for $616 million and then bought about a quarter of the fiber network being built by Qwest Communications Inc. for about $480 million.
"All the traditional telco's have realized that growth is in data and Internet," Forrester Research Inc. telecommunications analyst Jim Freeze. While not the largest player in the data game, GTE clearly is a growing competitor.
"GTE is very formidable, a very powerful presence in data and Internet," said Jeff Kagan, of Kagan Telecom Associates.
Bell Atlantic has an existing and expanding fiber network of its own within its 13-state operating region between Maine and Virginia. But federal telecommunications law prohibits the local carrier from extending the network beyond its borders.
"Bell Atlantic brings a data-hungry customer base," Kula said.
GTE's Internet and data capabilities, "enable Bell Atlantic to move along the value chain in the industry," said Raul Katz, a partner specializing in the telecommunications industry at the research and consulting firm Booz-Allen & Hamilton.
The analysts agreed, however, that regulatory issues may preclude Bell Atlantic from gaining access to the GTE data network.
Under the Telecommunications Act, Freeze said, Bell Atlantic is not allowed to offer data transmission services outside its region and all observers expect the combination to face a vigorous regulatory review from both the traditional local services and the data perspectives.
"It's a huge hurdle for them to overcome," Freeze said. |
