Price war looms in corporate 100Mb market
Hundreds of megabits for hundreds of pounds
A corporate Ethernet price war could be on the cards, with a newcomer using Next Generation Network (NGN) technology to offer 100 megabit Ethernet for £800 a month.
Commercial Internet and other services have been, traditionally, based on legacy systems and up to six months ago the bulk of customers were asking for managed MPLS (multi-protocol label switching). But the costs of providing what modern business customers require under MPLS, SONET and other legacy protocols is very much higher than it is with a full new technology service.
Exponential-e will launch a new service today, which the firm's founder Lee Wade told The Register is intended to be "entirely disruptive". But he added that the price would not be the sole attraction for customers.
Exponential-e bases its NGN service on Alcatel-Lucent routers - a very similar technology to the Level II section of BT's 21CN - and so Lee Wade is pretty optimistic about getting a successful rollout that will be completely compatible with OpenReach's eventual product, currently being trialled in the UK. But he reckons he can do the new service "at cost, or break even" and provide several extra services, all for a fraction of the cost of managing legacy networks.
It's a gamble, Wade admitted. If he doesn't sign up new customers, he'll face discontent from existing customers who want the new price, and his bottom line will look wretched in a year's time when all the contracts start coming up for renewal.
"But the appeal is the versatility of providing VoIP, and internet, and WLAN, and virtualisation products," he said. "Right now, we'd quote £45,000 a year for this sort of service on managed MPLS. We can quote you prices starting at £800 a month for PowerNGN. But then we can go on and offer extra services, too.
How is MPLS a 'legacy' protocol
MPLS is anything but a legacy protocol, its actually an NGN protocol that delivers on a lot of ATM failed promises such as real QoS (if deployed natively and end to end, i.e. not stacked on top of ATM or some other legacy protocol).
Other than that i'd say 'All power to their arms', high bandwidth corporate networks have always had unjustifable prices and its about time this market became commodised and the prices were brought down to reality.
Not as 'special' as they'd like us to think...
The price quoted is likely to rely on customers being located within a certain reach of their PoP, based upon standard Openreach WES distance-dependent pricing, subject to survey (i.e. buildings with available fibre etc.)... As their network is relatively limited few will get this price.
Technically the analyst is right - others can copy this. However several competitors of EE are already doing this and have been for years - all it is is delivering separate rate-limited VLANs (one for each IP service, such as Internet, SIP, MPLS) down a single Ethernet circuit to the customer, its not rocket science.
So this is EE announcing something that is not new, that others are already doing, with a headline price available only to certain potential customers.
Situation normal in the telecoms industry... However kudos to them for getting the PR :-)
Wow, only twice as much as the US, and single-homed
Cogent have been offering dual path 100Mbit in the US, provided your building is wired up, for US$900 per month without bandwidth restrictions.
OK, so I hear that the bandwidth isn't all that great in terms of quality, but not having used it, I'm taking that with a pinch or few of salt.
Not sure if the offer is still on, but it was on for quite a long time last time I checked.