Second carriers

In their attempts to stay alive, Gigabit Ethernet service providers are carving out niches that place them in back-up roles.

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Despite financial distress, optical and Gigabit Ethernet competitors such as Broadwing Communications and Yipes Enterprise Services are hanging in there and might give incumbents a run for their money yet.

Broadwing recently announced third-quarter profitability, made possible in part by a restructuring that will save $200 million, a workforce cut of 500 positions and the dumping of its wholesale international voice business. The company counts Bank of America as a large customer.

And Yipes, once the Gigabit Ethernet poster child, is attempting a comeback from bankruptcy. It filed for Chapter 11 protection in March 2002. Yipes announced in July that it will focus on 10 markets, including Chicago, New York, San Diego, San Francisco and Seattle. The company will move customers in other locations to national service provider Expedient.

Gigabit Ethernet carriers also are adding service niches such as business continuity and disaster recovery. They are increasingly seeking customers for which they would hold the status of second service provider – something they weren’t willing to do previously, says Johna Till Johnson, president of Nemertes Research and a Network World columnist.

Their futures, she says, “hangs on their ability to cost-effectively meet the needs of the niches they’ve defined for themselves.”