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Summary

US telecoms operators are making new investments in European networks for their enterprise services and customers, offering more choice from the new wave of hybrid WAN, mobile, and Internet-based services. These developments complement recent announcements of pan-European network investments by Deutsche Telekom and other European service providers.

Level 3 and AT&T lead new service platforms to Europe

Level 3 Communications has extended Ethernet services into 27 locations across Europe and plans to add a further 15 locations in Europe, the Middle East, and Africa later in 2016. It is effectively taking its US Ethernet platform, which serves 223 markets across North America, into global markets. Like other US telcos it is reinforcing its network services offer through SDN and virtualization. The bandwidth-on-demand feature it currently offers on its US platform will be extended to Europe.

AT&T had already disclosed investments in virtualized enhanced packet core network in Europe, aimed at underpinning quality for connected car systems. It brought the news to MWC 2016 in Barcelona, together with an announcement that it will extend its NetBond cloud services interconnect program to European centers.

Verizon, meanwhile, has announced private IP connections to cloud services from Amazon Web Services and HP through its Frankfurt cloud data center.

These developments, together with the relaunch of European network operations by other US operators such as CenturyLink, GTT Communications, and Masergy, highlight the importance of advanced infrastructures in Europe as a potential hub for IoT applications services, as well as cloud services. These providers are turning their existing points of presence into advanced service nodes. Services will become regionally available faster than through traditional country-by-country service expansion.

Some other regional service providers are also reinforcing their enterprise network offers. Colt says it has the capacity to offer 1Gbps fixed broadband speeds as standard tobusiness sites in 20 cities across Europe. And NTT Europe will now provide managed services for global MNC customers of NTT Communications across the Global Management One IT service management platform, which is being deployed into Europe via the Atlas IT operation in Barcelona.

All of this is good news for sourcing managers of large enterprise and global MNCs, especially those emerging in Asia-Pacific and Latin America that are looking for new footprints in Europe. It is also good news for SMEs in Europe that would like to upgrade to enterprise-class managed networks, because these will now become more available and affordable to them. It is still early days for everyone, though; for most service providers these investments are the first step to full on-demand SDN-based offerings, which will include advanced services beyond connectivity. More choices for the enterprise requirement in European footprint will help reduce the overhead of country-by-country purchasing. European providers will be pressured to create more regional coverage approaches to new services and to eliminate country-by-country service rollouts.

Appendix

Further reading

“BT’s acquisition of EE will create a global partnership with Deutsche Telekom,” TE0005-000789 (February 2016)

IoT Investments Tracker: 2H15, TE0019-000014 (December 2015)

“AT&T invests in IoT networks in Europe and Canada as connected cars accelerate,” TE0001-000999 (October 2015)

Ethernet Services Forecast Report: 2015–20, TE0006-001125 (September 2015)

Author

David Molony, Principal Analyst, Enterprise Services

david.molony@ovum.com

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