As their traditional residential voice business dwindles, many Tier 2 (and Tier 3) telcos are aggressively pursuing the business and wholesale markets, as a couple of announcements today illustrate. CenturyLink launched a new ad campaign for the business market. And Windstream announced the nationwide expansion of its wholesale Carrier Switched Ethernet service.
Unlike Tier 1 carriers AT&T and Verizon, many Tier 2 and Tier 3 carriers do not have a wireless business to fall back on. As a result many of those carriers view the business market as their best growth opportunity.
CenturyLink said its new ad campaign will include television, print and online ads and will reinforce the company’s commitment to providing global broadband, cloud infrastructure and hosted IT solutions.
“Our products and services, along with our dedicated customer service, mean we can provide real value to our customers and enable them to focus on what they do best – run their businesses,” said CenturyLink CEO and President Glen F. Post III, in today’s announcement.
Intriguingly, Post also made a point of saying that although the brand campaign focuses on the company’s business offerings, “our strong commitment to our residential customers remains. We are dedicated to being the leading broadband provider in our markets and we continue to roll out new and innovative products, such as CenturyLink Prism TV.”
Those comments suggest that CenturyLink may be sensitive to concerns that telcos might be abandoning their traditional residential customer base – a concern that has arisen now that AT&T has asked permission to phase out its traditional phone service infrastructure and Verizon has scaled back support for its DSL offering.
Carrier Ethernet gains steam
It’s not surprising that CenturyLink plans to emphasize the company’s cloud infrastructure and hosted IT solutions. Over the last couple of years, we’ve seen Tier 2 and 3 carriers make major investments in data centers — the launching pad for a variety of fast-growing cloud and hosted services.
More recently Ethernet, another fast-growing market, seems to be a key focus area for Tier 2 and Tier 3 telcos – driven, perhaps, by new standards that simplify the ability of carriers to interconnect with one another to support Carrier Ethernet services. Mobile backhaul also is moving heavily toward Carrier Ethernet to support higher-speed mobile data connections, and incumbent telcos’ dense footprints may offer them a leg up in that market – although further investment typically is needed to bring fiber to cellsites that don’t already have it.
Just last week FairPoint announced that it had launched Carrier Ethernet Service Extended Connect – a wholesale offering that gives other carriers connectivity from Boston to Fairpoint’s footprint in Maine, New Hampshire and Vermont.
Windstream’s Nationwide Carrier Switched Ethernet expansion, announced today, appears to be a similar service – offering Carrier Ethernet connectivity from major metro areas such as New York, Philadelphia, Baltimore, Chicago, Houston, Dallas, Denver and Phoenix to ILEC and CLEC exchanges within Windstream’s footprint.
Windstream offers interconnect ports of 100 Mbps, 1 Gbps, and 10 Gbps, as well as end user loops from 3 Mbps to 1 Gbps.
I’ve asked Windstream for more information about the offering – such as what infrastructure underlies the new connections to metro markets outside the company’s traditional footprint. Will file an update after I hear back from them.
UPDATE: Windstream got back to us to advise us that the metro areas referenced in the announcement are all served by networks the company has acquired over the past couple of years.
