BellSouth has teamed up with Sprint Nextel to provide nationwide data services across the U.S. in a move that could help BellSouth compete with other carriers that are merging to create giant companies.
The BellSouth service will connect BellSouth's private IP network in the southeastern U.S. with Sprint Nextel's data network elsewhere in an effort to provide data service to businesses with multiple locations, BellSouth said Monday. The service, expected to be available in the first quarter of 2006, will use MPLS technology to speed up network traffic and to allow users to connect to the network through multiple protocols.
Terms of the deal were not disclosed. BellSouth is still working on cost and service options, said Todd Smith, a BellSouth spokesman.
BellSouth pursued the partnership with Sprint Nextel because of customer demand for nationwide data services, but the deal should help BellSouth compete with merging competitors, Smith said. Large telecom carrier Verizon is in the midst of acquiring voice and data provider MCI, and telecom carrier SBC is acquiring voice and data provider AT&T.
"Regardless of what's happening in the industry, BellSouth wants to be the premier data provider for its customers," Smith said. "[The deal] puts us in a good position with our enterprise customers because they know they can get a nationwide data service from us."
In many cases, large companies with multiple office locations have had to piece their networks together themselves and manage multiple locations, each with specific network requirements, BellSouth said. The goal of the new service will be to provide a managed network regardless of customer location.
The deal is a good move for BellSouth, said Jeff Kagan, an independent telecom analyst. "This move is important because it allows BellSouth to change as the industry changes," Kagan said. "It allows them to stay competitive on the business side as well as the consumer side. This allows BellSouth to be competitive with companies like SBC and Verizon."
Verizon, SBC and BellSouth are three of the four regional Bells remaining after the U.S. government breakup of the old AT&T in the mid-1980s. Those regional Bells will need to compete more with each other, as well as new voice and data competitors such as cable television providers, Kagan said.
"Companies like BellSouth do not have to own a network in order to compete," he added. "As long as they have access to nationwide networks, they will have the opportunity to be competitive."
BellSouth currently has a wholesale arrangement with Qwest for nationwide connectivity. Smith said that arrangement continues and that the Sprint deal is BellSouth's first nationwide wholesale arrangement for MPLS.
He declined to comment specifically when asked if BellSouth evaluated Qwest for nationwide MPLS interconnections. Qwest's OC-192 fiber backbone is considered by some to be one of the more advanced IP/MPLS networks in the U.S.
Smith said, however, that even though the Sprint deal is the first for MPLS, it may not be the last. He said BellSouth is talking with other carriers about similar arrangements though he declined to identify those carriers.
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