WorldCom competes via fiber networks
WorldCom Inc. in Tulsa, OK, is solidifying its position as the fourth-leading national long-distance carrier by signing major fiber-optic equipment deals with Northern Telecom in Mississauga, ON, Canada, and Lucent Technologies in Murray Hill, NJ, for a significant fiber-optic network expansion.
"Through strategic acquisitions," notes Vern Mackall, senior analyst at Northern Business Information in New York City, "WorldCom has shaped itself into a sturdy number-four position in the U.S. long-distance market. Its strategy is to continue growing quickly enough to attain sufficient scale and scope to compete effectively with the `Big Three.` This new fiber build-out will create an important part of the infrastructure needed to make good on that strategy."
Northern Telecom is supplying WorldCom with more than $500 million in fiber-optic equipment over the next three years, and Lucent Technologies has been awarded a $35-million contract to provide TrueWave singlemode optical fiber and fiber-optic cable. WorldCom`s network expansion supports high-revenue-growth market opportunities such as voice and data-access service, Internet access, video transmission and multimedia applications.
Communications analyst Ronald Brown in Melrose, MA, says, "WorldCom`s massive network upgrade announcement is a boon for fiber-provider Lucent Technologies, which quickly needs several high-profile sales under its new name. It`s an even greater boon for Northern Telecom, which is providing more than $500 million dollars of high-margin fiber electronics over the next three years. But the real winners will be users, who will benefit from the increased services and lower prices. This is because WorldCom is a strong competitor to the `Big Three` long-distance carriers--AT&T, MCI and Sprint."
Northern Telecom is supporting the WorldCom fiber-optic network expansion with its Synchronous Optical Network (Sonet) transport equipment, includ ing S/DMS TransportNode OC-12 at 622 Mbits/sec; OC-48 and OC-192 optical amplifiers at 2.5 and 10 Gbits/sec, respectively; network management products, and information networking architecture platform.
According to John A. (Ian) Craig, president of broadband networks at Northern Telecom, "We`re pleased to be involved with one of the largest fiber-optic infra structure builds in the world." WorldCom uses Northern Telecom`s transport and DMS-250 switching elements and incorporates optical amplifiers for extended coverage (see figure).
Russ Ray, vice president of engineering at WorldCom, says, "Northern Telecom`s fiber-optic technology provides network reliability our customers depend on, allowing us to maintain our approach of zero balance for service outages."
Commenting on the significance of the Northern Telecom contract, Randall Carlson, senior analyst in telecommunications at the Yankee Group in Boston, says, "The deal demonstrates WorldCom`s commitment to becoming an international telecommunications giant. While WorldCom was the pioneer in providing long-distance fiber resale, it lagged in its fiber capacity. Exploding Internet traffic demands from wholesale customers and Internet partners like Netcom Communications have strained WorldCom`s network.
Bill Magill, senior analyst at Ryan-Hankin-Kent in San Francisco, says WorldCom`s contracts "establish the carrier`s interest in wavelength-division multiplexing (WDM) as a high-speed transport solution. Lucent`s TrueWave product is a nonzero-dispersion-shifted fiber developed specifically for multiwavelength applications, and Northern Telecom plans to have WDM platforms to support transmission rates of 10 Gbits/sec and higher available this year.
"WorldCom seems to be considering the deployment of 10-Gbit/sec time-division multiplexing, given its interest in Northern Telecom`s OC-192 product. This agreement extends the relationship WorldCom maintains with Northern Telecom for transmission systems." Magill explains, "Although there are no exclusive purchase agreements between the two parties, Northern Telecom has been WorldCom`s primary vendor for Sonet systems for the past three years.
"Due in part to its sales success with the long-distance carriers, Northern Telecom has established itself as the leader in high-speed Sonet systems," continues Magill. "At $500 million, this large contract should help Northern Telecom maintain that distinction." Lucent Technologies will also expand WorldCom network fiber projects by providing more than 2000 route-miles of fiber-optic cable for two network segments WorldCom plans to deploy this year in the United States.
The sale ranks as one of the largest for TrueWave fiber by Lucent Technologies. The first span extends 1114 route-miles from near Joplin, MO, to Cleveland, passing through or near St. Louis, Indianapolis, Cincinnati, Dayton, OH, and Columbus, OH. The second link spans 1075 route-miles from Salt Lake City to Portland, OR, and Seattle and supplements an existing digital microwave system.
TrueWave fiber is compatible with various types of commercially available telecommunications transmission equipment. Bell Laboratories, the research and development arm of Lucent Technologies, developed TrueWave fiber, which was used in an experiment reported at OFC `96 to send record-breaking 1-Tbit/sec transmissions (see Lightwave, April 1996, page 6). Fitel, a Lucent Technologies manufacturing joint venture based in Carrollton, GA, is slated to manufacture and supply the loose-tube fiber cable for the projects.
According to Gary Shaw, vice president of fiber operations and network planning at WorldCom, "Within the overall architecture of our network, the Lucent cabling system is expected to give us more ways to serve additional cities. When this fiber cable is installed, we will be able to route traffic around fiber outages to continue service on our network."
Fiber cable will be pulled inside and along the outside of decommissioned petroleum pipelines for much of the installation between Joplin, MO, and Cleveland. WorldCom pioneered this deployment technique. Construction of the two segments is slated to be completed in the fourth quarter of 1996, according to WorldCom sources.
In other WorldCom agreements, the company has recently completed contracts with Ameritech, GTE and Southwestern Bell Mobile Systems, a subsidiary of SBC Communications Inc. The Ameritech pact is a five-year contract to provide long-distance telecommunications services to Ameritech Communications Inc. WorldCom is Ameritech`s primary provider of switched long-distance transport, which will be fully integrated into any long-distance offerings Ameritech provides its customers.
The Yankee Group`s Carlson says, "The switched services agreements with Ameritech, GTE and Southwestern Bell Mobile will make network availability WorldCom`s single greatest priority. Now that WorldCom has secured additional fiber from Lucent and committed to Northern Telecom`s TransportNode architecture, WorldCom is back on track. The Northern Telecom contract demonstrates the dominance of the company in high-capacity Sonet transmission equipment."
The GTE agreement is a multiyear accord for WorldCom to become a predominant provider of long-distance telecommunications services within a local access and transport area for GTE affiliates. In the Southwestern Bell Mobile Systems agreement, WorldCom is providing such services.
The WorldCom organization includes LDDS WorldCom in Jackson, MS; Wiltel WorldCom in Tulsa, OK; and IDB Worldcom in New York and Los Angeles. Wiltel`s fiber network totals more than 10,000 miles, and the company has access to more than 30,000 miles of fiber-optic networks through long-lease agreements with other carriers. LDDS has a fiber network covering more than 1300 miles and uses its own fiber-optic telecommunications facilities--primarily in the southeastern United States--and leased capacity from other carriers besides Wiltel. q