Bell Canada plans to buy $200 million-worth of network gear from Cisco Systems Inc. and expand its portfolio of Internet protocol (IP)-based offerings. Industry analysts say the deal provides a glimpse into the firms’ designs on the enterprise.
Bell announced the three-year partnership on Monday — an agreement that would consolidate the carrier’s disparate voice, video and data networks onto a single IP and Multiprotocol Label Switching (IP/MPLS) backbone.
According to Isabelle Courville, president of Bell’s enterprise group, the announcement is in keeping with Bell’s earlier statements regarding IP, such as its commitment in December to become a leading IP service provider.
“Bell is already building an IP world for its customers,” Courville said. “We will put the last piece of a big puzzle in place with Cisco, and develop with them the infrastructure that will allow the acceleration of the migration to IP and the development of a series of solutions.”
The network is supposed provide nation-wide support for advanced enterprise-class communications services such as IP telephony, IP virtual private networks (VPNs) and wireless applications. According to Terry Walsh, Cisco Canada’s president, his firm and Bell would also help enterprises design IP migration paths.
“Business customers in Canada…are telling us they need simplified and integrated communication services,” he said. “Solving this problem is ultimately what this Bell-Cisco alliance is all about.”
Roberta Fox, president of Fox Group Consulting in Markham, Ont., said the partnership makes sense, especially as it pertains to migrating enterprises onto IP. She said the agreement gives Bell a partner who is well versed in selling boxes to enterprise executives, which fits well with Bell’s expertise in talking to network managers, and it provides Cisco with further access to a lucrative market segment: “the enterprise telecom equipment sale.”
However, Fox also pointed out that if Bell and Cisco want to impress corporate Canada, they’ll have to offer more than technical know-how. IP projects usually require that data and telephony experts in the enterprise come together, which isn’t always easy. Data folks know the ins and outs of IP, but they lack experience in voice applications. Voice experts can draw up dial plans, but they don’t speak IP.
Sometimes it’s hard to get the two camps to understand each other. “It’s the people and process issues that are slowing down migration” to IP, Fox said, adding that Bell and Cisco must address the human factor in their client consultations.
Jon Arnold, an industry analyst at Frost & Sullivan in Toronto, said Bell’s announcement is just the latest in a string of similar statements from telcos as they embark the IP bandwagon. Late last year, U.S. carrier SBC Communications, for instance, said it would turn on a hosted IP service. Verizon, a New York telco, said earlier this month that it would buy IP gear from Nortel Networks.
Bell itself has been bullish about IP, telling investors in December 2003 that it aimed to be the carrier’s carrier with superior IP services, unmatched by any other telco in the world. In September Bell said it would spend $200 million on Nortel optical equipment and build a transport network capable of supporting IP.
That said, Arnold pointed out that Bell still has no service comparable to Burnaby, B.C.-based Telus Corp.’s IP-One, a hosted voice-data offering for businesses. This, given Bell’s previous announcements that it had chosen Nortel’s equipment to provide just such a product, and that it is researching the very thing, seems odd. Why hasn’t Bell turned on its own hosted IP service? What is the company waiting for?
Arnold said Bell is playing it safe, as are many other carriers. “They’re going to wait and see what the take-up is going to be” for services like IP-One, he said.
He added that Bell’s Cisco announcement shows that the carrier is committed to IP at a time when competition is mounting. Witness datacom provider Primus Canada’s foray into IP telephony. Consider the rumour that Vonage, a U.S. VoIP service provider, has found a Canadian partner in Vancouver’s 360networks and will ramp up service in Canada soon.
Courville said Bell and its clients “are in the same situation, in a way,” explaining that both “have multiple data networks. It’s very complex for them to manage,” and by moving to a single IP network, “we’ll be able to simplify our offerings, our provisioning. We’ll be able to stop investing in legacy systems and overall, we’ll have better margins.”
