Update on Infonet

Infonet of El Segundo, Calif., is the subject of our second installation in an ongoing series about the reach, focus and stability of today’s top-tier, global ISPs.

Network executives needing Internet access in many locations around the world have six main ISPs to consider: AT&T, British Telecom, Equant, Infonet, MCI and Sprint. In two previous newsletters, we profiled Equant and the IP VPN services it offers to U.S.-based multinationals (see links below). This week we take a look at Equant’s closest competitor, Infonet.

Having launched its IP network in 1991, Infonet claims it is the original global ISP for multinational corporations. Today, Infonet offers IP services in 57 countries across the Americas, Europe, the Middle East, Africa and Asia.

Infonet’s flagship offering is called IP VPN Secure, which runs on a private IP network that uses Multi-protocol Label Switching (MPLS) technology. IP VPN Secure offers five classes of service: three for data, one for voice and one for video.

Infonet also offers IP VPN Internet, which runs on the public network and uses the IPSec protocol for encryption, authentication and key management. Infonet plans to migrate its Internet-based service to MPLS by the middle of next year.

“At that point, we will be the first and only global Internet provider to have an MPLS network. That allows us to do two things: configure IP VPNs over the Internet using MPLS and…configure seamless networks with pieces of the private IP VPN Secure service,” explains Jean-Noel Moneton, vice president of IP marketing for Infonet.

Moneton says having MPLS as the foundation of both its private and public VPN services will be more cost-effective for companies with smaller sites that don’t justify classes of services over the company’s private IP network.

Companies that need Internet access in countries outside of the 57 countries that Infonet supports can purchase another service called IP VPN Off Net.  This security service allows customers to access Infonet’s network via a third-party ISP. Infonet secures the traffic using IPSec, digital certificates and firewalls.

Infonet has more than 3,000 enterprise customers, including Hilton, IBM and Nestle. Among Infonet’s latest wins for IP VPN service are Estee Lauder, Paramount Pictures and Biogen.

“Infonet seems to sell the fact that they have their own backbone network…and can do MPLS in so many countries,” says Brownlee Thomas, a senior analyst at Forrester Research. “Once you go beyond about the top 45 markets [overseas], it’s really Equant or Infonet that’s available.”

In recent years, Infonet has been more stable than many of its competitors. The company has six major telecom carriers as shareholders – Swisscom, KDDI, KPN, Telia, Telstra, and Telefonica – that together own roughly 85% of the company. The remaining 14.8% is publicly traded. This ownership arrangement has not changed since 1999, when Infonet held an IPO.  

This ownership arrangement can be an advantage on some bids, Thomas says. “Infonet has a strong position in some key markets and the ability to call on their co-owners to give them extra capabilities,” she says.

In the first half of 2003, Infonet reported revenue of $300.3 million, up slightly from the $290.1 million recorded a year ago. While Infonet reports that its core business is growing at the healthy clip of 15% this year, the company remains about a quarter of the size of its rival Equant.

Next up on the ISP News Report: Future directions for Infonet.