Singtel and Airtel Business have announced a strategic alliance that will deliver a single IP VPN network globally. This network alliance will be fully integrated from an operations and IT perspective, and customers will see it as one single network. The combined network will have extensive coverage across Asia-Pacific, especially India and Australia; the Middle East; Africa; Europe; and the US. The combined assets will give their customers access to 325 cities around the world through 370 points of presence (Singtel’s 200 PoPs in 160 cities around the world and Airtel’s 170-plus PoPs in 165 cities across India, Africa, and the Middle East).
Alliance will help Singtel and Airtel Business service MNC needs
Several implications and planned benefits can be derived from this strategic alliance:
One single network will give deeper coverage for Singtel and Airtel Business. One of Singtel’s weak spots has been coverage in the Middle East and Africa. The alliance will strengthen its ability to single-handedly service its customer base of multinational corporations (MNCs) that are looking for strong network support in both regions. Airtel Business can offer one single global network to Indian MNCs, making it a global player with one single touch. Indian MNCs have always had a global approach to expansion, and there is a natural set of customers to reach out to. Plans are in place to migrate existing international customers to this network, and this will be one of the immediate benefits of the alliance.
Airtel Business will have access to Singtel’s capabilities, solutions, and expertise. This would include Singtel’s wide area network (WAN) optimization, network management, and other network-related services, including a software-defined WAN offering. This will allow Airtel Business to compete head-on with Tata Communications and other global service providers that are targeting Indian MNCs for global MPLS contracts with a full suite of network capabilities.
Expect further services from this alliance in other ICT areas. Airtel Business stated that there will be further alliances and partnerships with Singtel in other ICT segments, including cybersecurity, leveraging Trustwave capabilities, and enterprise mobility. No firm launch date has been announced, but Airtel Business hinted that it will be within the next 12 months.
Singtel is a significant shareholder in Airtel Business, with a reported 33% stake. It clearly wants to leverage this investment better with a tighter alliance that fills several gaps in its network portfolio and will allow it to compete for a greater wallet share among its targeted Fortune 500 set of customers. The alliance turns Airtel Business into a service provider with a global network overnight. Although Level 3 is not part of this alliance, it would make sense that it may be of the key suppliers for US and European coverage. There are plans for joint marketing, go-to-market campaigns, and solution selling. Ovum believes that this relationship polishes up the network portfolio of both service providers, and with proper execution – a major challenge for any service alliance – it can turn into a mutually beneficial relationship. Ovum would also expect to see many more similar global service alliances being introduced among ICT providers and services.
Singtel: Regional Leadership in Network Services, TE0005-000688 (September 2015)
Adrian Ho, Principal Analyst, Enterprise Services