Fiber networks mushroom in Europe`s financial centers
Fiber-optic synchronous digital hierarchy networks are taking over Europe`s financial centers, with MFS Communications Co. Inc., Omaha, NB, spearheading the expansion. In a significant breakthrough, the company has been granted licenses to build networks in Paris and Frankfurt. This marks the first time a non-government owned carrier has been allowed to construct a metropolitan network in either of these cities.
The company has also announced a build in Stockholm and various agreements with Telecom Finland, which is considered one of Europe`s technology leaders. To support its international expansion, the company has raised $500 million in capital through debt and public offerings.
Gail Smith, European marketing director of MFS Communications International, explains why the company`s expansion program is working. She notes that the first wave of expansion is focused on international financial centers. "These centers can take the biggest advantage of our fiber end-to-end networks and the high resiliency they offer. They also tend to be the ones concentrated in city centers. As we build metropolitan fiber networks, we try to find the highest possible concentration of buildings served in a geographic area."
Following the success MFS Communications had with its London build, Frankfurt and Paris were key in serving what Smith refers to as the "golden triangle" of the European financial market.
In Europe, which will only deregulate its telecommunications market (for the most part) in 1998, getting in early is critical, according to Smith. In Frankfurt and Paris, the company was able to convince government authorities to grant licenses based on a more liberal interpretation of existing legislation. Also helpful was the fact that it was already doing business in both cities using lines leased from France Telecom and Deutsche Telecom.
In Germany, Frankfurt--not Bonn--is the country`s financial capital. Frankfurt plans to use MFS Communications` 10-kilometer SDH ring as a marketing tool to attract financial companies. MFS has used existing conduits wherever possible. Smith adds that since the company`s origins are in the construction business, it is experienced in working with city governments. Unlike the London build, in which right-of-way came with the license, the company has had to negotiate with the city of Frankfurt and various local organizations for the laying of fiber.
"Each negotiation is city-specific," explains Smith. "The offer, however, is essentially the same." The asynchronous transfer mode platform is used to provide a full range of services, including delivery of video to the desktop for financial information, and local area network interconnect. Voice services vary according to country. For now in France and Germany, the company can only offer international resale and corporate voice services (within a corporate private network). However, as soon as deregulation allows, general voice services will be readily available, since all the switching is in place.
The Paris build will cover the downtown area with a 20-km synchronous transport module-1 loop from the Arc de Triomphe on the western edge of the city through the stock market area (the "Bourse") to the Les Halles district in the heart of the city. This loop will be linked by an STM 4 or 16 connection to the 4-km loop at La Defense, the business center just outside of the city`s western edge. The network will use 48-, 72- and 144-strand singlemode fiber.
A call for proposals will be issued, but MFS Communications plans to use French suppliers for equipment, cable and construction as much as possible. Wayne Sutton, director of development for MFS in France, explains that once these major loops are in, the company will add logical loops to nearby buildings as needed. This was the strategy the company used in London, where the initial 29-km loop has now doubled in length. MFS is currently negotiating rights-of-way for the Paris build and may run through part of the city`s 1600-km sewer network as well as through underground transportation systems.
While MFS emphasizes its competitive services, the Paris build puts the company in competition with France Telecom`s flexible optical network (reseaux optiques flexibles, or ROF) offerings, which similarly target business districts.
Jeremy Ledger, research analyst with Dataquest`s European Telecommunications Group, says, "Both MFS Communications and France Telecom are offering fiber connections to such sites for the same reasons: flexibility, reliability, high capacity and future-proofing. There are, of course, numerous regulatory hurdles in their way, but the European business community has been very critical of monopoly public telecommunications operators--and it`s exactly these customers that MFS Communications is targeting."
Smith of MFS Communications also emphasizes the importance of the Stockholm build, which has just gone into service and is a key in strengthening the European/American link. Additionally, MFS has signed an interconnection agreement with Telia, a Swedish telephone company. The Stockholm network will also be the interconnection site between MFS` and Telecom Finland`s ATM-based networks.
Looking ahead, MFS Communications has an ambitious schedule, targeting builds in another 20 European cities (including Zurich, Amsterdam, Brussels, Milan and Madrid) over the next three years. q
Adele Hars writes from Paris.