* Why MPLS is at the core of AT&T's infrastructure
AT&T’s strategy for its IP services can be summed up in an acronym: MPLS. Developed by the Internet Engineering Task Force, Multi-protocol Label Switching is a traffic management technique that allows users to prioritize network applications such as voice, data and video to ensure reliable and high-quality transmission.
AT&T offered its first MPLS-based services in 1999 with its IP-Enabled Frame Relay service. Since then, the company has installed MPLS across the backbone and at the edges of its global IP network. Indeed, MPLS is at the heart of AT&T’s plans to create new services for its enterprise customers.
“MPLS is at the core of our IP infrastructure,” says Mike Jenner, vice president of Global IP Services for AT&T. “We use it for traffic engineering and the management of our backbone…Essentially all of our [IP] traffic is receiving the benefits of MPLS.”
We’ll look at AT&T’s MPLS strategy in this third installation of 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 previous newsletters, we profiled Equant and Infonet (see links below).
Of the top-tier ISPs, AT&T has been making significant investments in its network infrastructure. In 2002, AT&T spent $300 million on the company’s IP network. In 2003, AT&T invested $3 billion – virtually all of its capital expenditure budget – to facilitate its migration from a circuit-switched network to an IP packet-based network. Much of that funding has gone into MPLS.
“MPLS is definitely a differentiator if you look at the top six ISPs,” Jenner says. “Other providers are taking a different path to MPLS or they are late to arrive at the party. MPLS is central to both parts of our strategy – for servicing customers and for network engineering.”
AT&T has installed 143 MPLS nodes in North America, Europe, Asia-Pacific and Latin America, and the company will continue expanding the number of edge routers with MPLS capabilities in 2004. AT&T’s IP network reaches more than 50 countries directly and another 100 countries through partners.
While ISPs such as Equant and Infonet serve more countries directly than AT&T does, AT&T argues that it offers the best MPLS coverage in the U.S.
Industry analysts agree that an ISP’s U.S. network footprint often drives the purchasing decisions of U.S.-based multinationals.
“The U.S. market, because of its geographic coverage, needs a lot of bells and whistles. The international market doesn’t need a lot of bells and whistles,” says Vijay Bhagavath, a telecom industry analyst with Forrester Research. “The U.S. market is the most demanding in terms of [service-level agreements] and applications. I haven’t heard of customers in Europe or Asia talking about VOIP or ERP.”
Many U.S. multinationals prefer a U.S. ISP, which gives AT&T an advantage when compared to overseas competitors such as Equant and BT.
“Some U.S. officials will go with AT&T here and with Equant elsewhere,” says Brownlee Thomas, a senior analyst at Giga Information Group. “There’s always a bias to do business with a local carrier.”
Indeed, AT&T is the number one provider of IP services in the U.S., according to telecommunications research firm RHK. AT&T achieved this milestone more than a year ago, when it surpassed MCI in terms of carrying the most IP traffic.
AT&T officials say the company’s IP traffic continued to grow in 2003, although not as fast as it was in the late 1990s and early 2000s, when it was doubling each year.
For 2004, AT&T will continue expanding its MPLS footprint to meet customer needs. And it will continue to price its IP services aggressively.
“We can’t close the deal without talking about price,” Jenner says. “But we can’t even get close to closing the deal without the right coverage and quality. That’s a big part of our proposition is that we help companies improve their productivity.”
Next up: AT&T plans soup-to-nuts IP services.
