Carriers Sneak Behind Bell-Company ATM Lines
(03/25/99, 11:41 a.m. ET)
By Kate Gerwig, tele.com
AT&T moved further into traditional
Bell-company services this week by rolling
out a local ATM service in addition to its
national ATM service. And an end-to-end
ATM service controlled by one service
provider may help lure frame relay services
customers into ATM, ultimately speeding its
growth rate, analysts said.
AT&T said it is the first service provider to offer a
package of local and national ATM service. An MCI
WorldCom spokesman said while it has made no
official announcement, the company has made its Metro
ATM service quietly available to customers in 322 U.S.
cities since January. Its end-to-end connectivity can
provide international reach to 13 countries on the same
platform, the spokesman said.
Giga Information Group analyst Lisa Pierce said as
MCI's ATM network transitions to mirror WorldCom's
(moving from a Newbridge platform to a Cisco
platform), she expects the company to offer a seamless
local and long distance ATM service similar to what
AT&T is doing.
ATM Comes Of Age
The increased competition could be a good sign that
ATM services are coming into their own, largely
because of their ability to carry broadband voice and
video traffic. Boston-based Yankee Group forecasts
ATM services growth in the United States as increasing
from $284 million in 1998 to an estimated $464 million
this year, and jumping to $1.9 billion by 2002. And
while frame relay services command a much larger
portion of the data-services market, its growth rate
won't be as high as ATM's, according to Yankee
data-services program manager Kitty Weldon.
Comparatively, frame relay services are expected to
grow from $3.4 billion in 1998 to $9.6 billion in 2002.
Expanding its reach into the local market, AT&T will
offer local ATM in 41 cities by the end of the third
quarter, though four cities are available today -- Los
Angeles; Oakland, Calif.; Phoenix; and Portland, Ore.
Additional groups will be added on April 1 and May 1,
with the final 15 added in the third quarter. Further
rollouts will depend on customer demand, according to
Kristine Demareski, AT&T local packet-services
product director.
According to TeleChoice broadband services analyst
Cathy Gadecki, before TCG's purchase by AT&T last
year, the company offered local ATM services, but
AT&T is extending the capabilities to more cities. "It
makes sense that they are leveraging more of their
investment in TCG and expanding it to compete with
the RBOCs," Gadecki said.
"What impresses me about this announcement is it
shows AT&T is not just mouthing words at the top of
the organization about merged platforms to offer local
to national services. We're actually seeing investment
and products being rolled out," Gadecki said. "In the
past six months or so, ATM has been flying off the
shelves to a lot of the existing frame relay base."
AT&T is backing its local and national ATM services
with SLAs, and customer promises of local and
national services on one bill and a single point of
contact. The SLAs address on-time provisioning,
service restoration time, latency, a 99.99 carrier-quality
data delivery rate for the CIR, and 99.99 percent
network availability on the customer's ATM network
rather than AT&T's ATM network average.
TeleChoice's Gadecki said AT&T's local ATM
services target traditional Bell-company ATM
customers, particularly in the government and health
care market segments. "AT&T is offering those
customers one fee that covers both the port and local
access charges," Gadecki said. "Traditionally,
customers can pay a couple thousand dollars a month in
port fees to move their traffic from the local to the
national provider's network.
"In essence, AT&T is saying it doesn't matter how far
the customer is from the connection point, we're going
to serve them," she said.
AT&T has not announced specific pricing for its local
ATM services.
Interconnection Service Debuts
In addition to local ATM, AT&T is adding a
Transparent LAN Service that lets customers
interconnect disparate LANs in the same 41 cities.
AT&T will place a LAN to ATM Concentrator on the
customers premises for the managed Transparent LAN
service, which will convert LAN traffic into ATM cells,
transported on AT&T's network, and reassembled at
the end location.
"I expect some of the local carriers in cities where
AT&T is rolling this out might see this as yet another
wake-up call as far as competition," said Giga
Information Group analyst Lisa Pierce.
MCI WorldCom hasn't announced local ATM as part
of its end-to-end On-Net program that offers
customers bundled services discounts for traffic that
remains on its network, Pierce said. "ATM requires at
least a T1, and On-Net is designed to offer multiple
frame and voice services on a T1. But I expect MCI to
do something like this relatively soon."
The big disadvantage for regional service providers is
even if they can offer customers national or global ATM
connections from another carrier, a company such as
AT&T or MCI WorldCom has more end-to-end
control of the service if traffic stays on their network,
according to Yankee Group data-services program
manager Kitty Weldon. "If I were a Bell company, I'd
be very alarmed."
And while most of the Bell companies have ATM
service available in their territories, they are largely still
working out their standardized SLAs, Weldon said,
while AT&T has standardized its local and national
SLAs to match its frame relay SLAs. |
