Network Infrastructure
Telia in fiber-for-kit swap deal with Lucent
By Simon Marshall, Total Telecom, in Stockholm
29 May 2001
Telia International Carrier (TIC), the wholesale division of Swedish incumbent Telia AB, has detailed a far-reaching European and U.S. network expansion plan that includes an unorthodox agreement with Lucent Technologies to swap fiber for optical equipment.
TIC expects to expand its Viking network coverage beyond existing European power bases in Sweden and Germany to Eastern and Southern Europe, Russia and the U.S., but it is the deal with Lucent that will raise the most eyebrows.
President and chief executive Lars Rydin explained TIC had swapped fiber in Europe with Williams Communications and 360Networks, both carriers on the U.S. continent, in order to build its own U.S. network.
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TIC then exchanged some of this U.S. fiber with Lucent to gain multiplexing equipment and boost U.S. capacity, leaving the New Jersey-based vendor giant with fiber assets.
“It means Lucent can sell dim fiber as a total solution package to its customers,” said Rydin, of what looks like a further development in an emerging trend of vendors looking to manage operator's networks. According to Communications Week International, Marconi may be negotiating with as many as 10 European facilities-based operators to acquire and manage their networks.
A spokesperson for Lucent said, "We can't elaborate on the terms of the deal done [with TIC] last May."
Most of Telia's U.S. extension is still under construction through Chicago, Dallas, Denver, Los Angeles, Santa Clara and Seattle, and will be connected to Europe via existing nodes near New York City over the TAT-14 and AC-1 subsea cables.
“The U.S. network is fully-funded and we expect to have it finished by Q3,” Rydin told Total Telecom. “We've effectively transferred our production cost from Europe to the U.S.”
“In Europe, we're building from Dresden to Prague and Paris to the Spanish border, and by the end of this year, we'll have a network which covers all the major European cities,” he added.
TIC is now actively looking for partners in “middle sized” European cities to offer local loop connectivity, and will build what it terms 'low production cost' metropolitan networks in London, Paris, Frankfurt, Warsaw and Hamburg.
Expanding its Viking network to the Czech Republic and Poland are seen as a priority, but a framework decision has been made to build to destinations in Lithuania, Latvia, Estonia, Russia, Italy, France, Spain and Portugal. New POPs are being built in Warsaw and Prague for customers wanting to buy wavelengths on the network.
“With this European network, we can go on to use it for [fiber] swaps or get other parts of the geography covered and see how we can strengthen our position over the Atlantic,” said Telia AB's chief executive Marianne Nivert.
“It's a long-term business, of course, and you can't look at it from one quarter to another,” she added, referring to TIC's plans in general.
Although she doesn't consider Telia a “global actor for all services,” the incumbent depends on its 20% stake in California-based service provider Infonet to achieve connectivity along those lines.
Fellow stakeholders in Infonet, including Dutch incumbent KPN, have indicated they want to sell their respective holdings, but Telia appears keen to distance itself from them.
“There are no such plans,” a Telia spokesperson told Total Telecom when asked if it still wanted to sell its stake.
Telia International Carrier is a wholly-owned subsidiary of Telia AB.
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