Utfors branches out in Nordic region

NETWORKS

By EDWARD HARROFF

With Viking-like daring, Utfors has now branched out beyond its initial home market of Sweden into all neighboring markets. By the end of 2001, Utfors will link the 75 largest cities in the Nordic region. The company employs about 330 people in Stockholm, Oslo, Helsinki, Uppsala, Gothenburg, Malmö, and Överkalix. In addition to data services, Utfors' services include fixed telephony, LAN-to-LAN interconnect, and broadband virtual private networks (VPNs) to its corporate and residential customer base.

Utfors activated its Scandinavian fiber ring in January 2000. Since then, it has connected several Swedish cities and a large number of customers. Utfors is currently launching regional rings in stages as well as the Öresund ring to Copenhagen and a submarine-cable system to Helsinki, laying the foundations for a pan-Nordic broadband network.

The IP network is designed to enable use of the latest available technology both at the optic level (DWDM) and transport level (Giga bit Ethernet switch/routers and next-generation terabit routers). That promotes considerably lower transport costs than any other network in the Nordic region, enabling a series of high-quality broadband services, says the carrier.

The latest network extension in the Utfors network is Stockholm to Helsinki, which makes a stop on the island of Uto. Leveraging innovations in IP, Ethernet, and optical networking, Utfors' network architecture is designed to enable the deployment of multiple services over a single, cost-optimized network infrastructure. With the island stopover of Uto, Utfors was able to rely on terrestrial network equipment provided by Syca more Networks (Chelmsford, MA).

"We are building the next-generation IP broadband network to serve the Nordic countries and needed a versatile platform to address the unique requirements in our network routes," says Sten Nordell, chief technology officer at Utfors. "With the ability to cost-effectively span long-haul and ultra-long-haul routes in one platform, Sycamore's SN 10000 enables Utfors to offer new and differentiated IP services over our geographically diverse network."

This Stockholm-to-Helsinki network route represents an operational milestone for the Sycamore's Intelligent Optical Networking technologies. Utfors chose to deploy the SN 10000 with the Raman amplification option because it enabled the carrier to bridge this route without the need for optical-electrical-optical (OEO) regeneration. That's the first commercial deployment of the SN 10000, which is Sycamore Network's high-capacity intelligent transport platform; the company claims it is able to span distances of up to 4,000 km.

Utfors's growth se cret seems its focus on the enterprise broad band markets. In particular, smaller Nor dic transborder com panies are eager to cut their IT costs, and Utfors perceives its cheap broadband capacity is an easy operational solution. Utfors continued to report strong demand for the Utfors "IP Port." First-quarter results indicated that the 529 contracted access base is growing by more than 100 additional ports monthly. This type of Ethernet-based access network is also attractive to large enterprises, as a recent strategic contract win with SAAB (70 ports) indicates.

It's not easy being a pan-Nordic telecommunications carrier these days. Gone are the days when life was sweet and investors were pleased to place billions of dollars into ambitious cross-border network projects in Europe. Greenfield carriers can no longer pitch Internet, e-commerce, m-commerce, and the "new-economy" to entice the financial markets for new rounds of broadband network infrastructure investments. The current reality confronting publicly traded carriers, both incumbents and new bloods, is that share prices and bond issues have taken a hard hammering over the last 12 months. The broadband European whole sale price of an STM-1 connection can be used as an indicator of revenue shortfalls. Band-X, a bandwidth trading exchange, has tracked an annual drop of 35%. Infrastructure-oriented carriers need to shift their service portfolio to generate incremental revenues that replace the traditional reliance on dark fiber and bandwidth swaps.

However, Utfors remains optimistic. "For Utfors, the first quarter represented an important step in the company's development, since we were able to begin focusing on sales and the development of the company's direct broadband-based services," says Jan Werne, CEO of Utfors. "After an expected calm start to the year, I have noted with satisfaction a strong sales growth during March and April. In all, this makes me highly optimistic regarding the continued development of Utfors regarding direct business led by Utfors's IP-port services."

In one of the most mature telecommunications markets in the world, Utfors has envisioned a market segment that values the combination of an IP network that uses Ethernet protocol and advanced optical switches to reinvent broadband service delivery standards for a competitive marketplace. Now, all of Sweden's Nordic neighbors will benefit from Utfors network upon the completion of the 7,000-km broadband IP platform.

Edward Harroff writes on telecommunications issues from Bellevue, Switzerland, for the GEID Press Agency (Paris).

More in Earnings Statements