Europe favors Equant

During the last three years – as the telecommunications industry has experienced a severe and prolonged downturn – the ISPs targeting U.S. multinationals have changed dramatically in terms of their reach, focus and stability. Over the next few weeks we’ll provide you with an update on the top-tier global providers and the IP services they offer overseas.

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. Of these six carriers, Sprint has the smallest network overseas, but it resells IP services from Equant and Infonet. In the next few weeks, we’ll take a look at each of these ISPs, starting with Equant.

Equant has its origins at the network used by SITA, which provides data services to the airline industry. Once named Scitor, the company was renamed Equant in 1997. In 2000, Equant was merged with Global One, a joint venture between France Telecom, Deutsche Telekom and Sprint.

Equant’s network, which is based on Multi-protocol Label Switching (MPLS) technology, is now available in 220 countries and local support is available in 165 countries. 

“They have almost twice the reach of anybody else, and they’re in all the capital cities and international airports,” says Brownlee Thomas, a senior analyst at Forrester Research.

Here in the U.S., Equant has 17 offices and more than 2,500 employees – the company’s largest operation outside of Europe.

Equant is the carrier of choice for many European-based multinationals, including Zurich Financial Services, Le Meridien Hotels & Resorts and Landis + Gyr, a Swiss power measurement systems company.

“Equant wins are mostly European companies. Who else are the Europeans going to turn to?” Thomas says.

Equant has its share of U.S. customers, too, including 3M, APL Logistics, Ernst & Young and Hyatt International. 

Although it has many frame relay customers, Equant is selling IP VPN services in the U.S. The company is targeting such verticals as life sciences, pharmaceuticals, transportation and hospitality. Worldwide, Equant has 950 corporate customers for its IP VPN services.

“Frankly, the U.S. is behind in the movement to IP VPNs compared to Europe,” says Bruce Smith, senior vice president of sales and marketing at Equant. Smith adds that “Europeans seem to be more akin to managed services and have a greater comfort level with the Internet. Some of the security concerns and performance concerns make people in the U.S. nervous.”

Analysts say Equant faces a challenge in becoming the primary ISP for U.S. multinationals because these companies typically want to choose a carrier that’s based in their own country.

“Many U.S. CIOs will go with a U.S. carrier like AT&T here in the States and someone like Equant elsewhere,” Thomas says. “The problem is when you talk MPLS you don’t have interoperability. So one of your key data centers may have two clouds.”

From a financial perspective, Equant has the benefit of France Telecom owing 54.2% of the company. Equant’s third quarter revenue was $712 million, down 2.6% from the third quarter of 2002.

“Equant is in this for the long march,” Thomas says. “They’ll wait for the economy to improve. Equant doesn’t lose large amounts of money so they hope to be the last many standing. Then they’ll get customers who have no where else to go.”

In our next issue of the ISP News Report, we’ll look at Equant’s efforts to expand its consulting services.