* BellSouth, Sprint Nextel to link national data network
First it was MCI passing up numerous higher offers to accept lower bids from Verizon. Now is BellSouth also snubbing Qwest?
BellSouth last week announced that it is teaming up with Sprint Nextel to interconnect BellSouth’s regional MPLS network with Sprint Nextel’s nationwide MPLS facilities. The linkage will enable BellSouth to offer nationwide MPLS-based data services to enterprise customers in the first quarter of 2006, the RBOC said.
Yet, BellSouth and Qwest already have a wholesale nationwide interconnect arrangement and have had so for years. And Qwest is considered to have one of the most advanced OC-192 IP/MPLS fiber backbones in the country.
Why not extend this arrangement to include MPLS?
BellSouth does not have a specific answer to this question. A spokesman at the RBOC said the arrangement with Sprint Nextel is the first such MPLS interconnect deal for BellSouth but perhaps not the last. He said BellSouth is talking with other carriers about similar arrangements though he declined to identify those carriers.
Qwest also would not say whether BellSouth considered Qwest for the MPLS interconnect arrangement. A Qwest spokeswoman says the non-MPLS interconnect deal with BellSouth continues nonetheless.
An analyst, however, says the BellSouth/Sprint Nextel deal could cost Qwest “several hundred million dollars annually.”
“We believe this could be a significant negative for Qwest, which is currently a large provider of wholesale transport services to BellSouth,” wrote Jeff Halpern, an analyst at Sanford C. Bernstein and Co., in a bulletin on the BellSouth/Sprint Nextel interconnect deal.
“BellSouth’s motives for choosing Sprint Nextel as its wholesale transport partner are unclear. Qwest also has an MPLS backbone network, suggesting technology alone was not the deciding factor,” he wrote.
Maybe it was several of MCI’s enterprise customers threatening to leave MCI if it chose Qwest over Verizon. Maybe it’s Qwest’s tenuous financial position underscored by over $17 billion in debt.
Whatever it is, Qwest shouldn’t take it personally; it’s just business.
