Network builder enters provider game

Ledcor Industries Ltd. is branching out from its role as a builder of national fibre routes and moving into the network provider space.

Ledcor subsidiary Worldwide Fiber Inc. is installing switches from Nortel Networks, Newbridge Networks and Fore Systems on dark fibre lines running from Seattle to Vancouver to Toronto, via Minneapolis, Chicago and Detroit. The fibres include the last 12 of 48 lines Ledcor installed along Canadian Pacific Railway rights of way. Call-Net Enterprises Inc., AT&T Canada (through its merger with MetroNet Communications) and Bell Nexxia each also own 12 lines.

While Worldwide Fiber is lighting the national fibre route, it does not initially plan to offer network services itself, said Steve Baker, vice-president of bandwidth services and chief technology officer. Instead, the company will become a wholesaler, offering space on the network to service providers whom in turn will offer network services to end clients.

Baker said this approach will prevent Worldwide Fiber from competing head-to-head with carriers such as Bell Nexxia, Sprint, AT&T Canada and BCT.Telus.

“We’ll be exclusively wholesale,” he said. “We don’t have the retail operations to go up against the incumbent carriers.”

The least amount of bandwidth Worldwide Fiber will sell is a DS-3, Baker said, with the upper limit running to an impressive OC-192.

“We’re going to be operating at a very high level,” Baker said. “We’re just focused on providing services to service providers.”

Worldwide Fiber plans to have its network up and running by Oct. 1.

Eventually, the company will have a fully redundant Canadian link, once Ledcor completes the installation of 24 fibre lines for Worldwide Fiber along Canadian National Railway rights of way.

The 24 cross-country CN lines will be in addition to 48 cross-country fibre lines Ledcor is installing for BCT.Telus along CN rail routes.

Worldwide Fiber already has networks in the downtown cores of Vancouver, Calgary, Toronto, Ottawa and Montreal. The company ultimately plans to operate a 23,000-kilometre North American network.

Worldwide Fiber also has international aspirations. The firm announced in July it was installing a 12,200-kilometre undersea cable link to the United Kingdom that will include landing points in Halifax, Boston, Dublin and Liverpool.

Baker said it made economic sense for Worldwide Fiber to move into the network operating business.

“There’s no prize for having all of the world’s dark fibre,” he quipped.

Bob Hafner, an analyst with consultancy Gartner Group Canada Inc. in Mississauga, Ont., noted that Worldwide Fiber isn’t the first company to move from the fibre building business to the network operating business.

“If you look at companies like Level 3 and Qwest (both U.S.-based), they started as fibre building companies,” he said. “I’m sure they looked at that model and thought it should work for them, too.”

Hafner doubts Worldwide Fiber will be an enterprise player. But he noted there are many small ISPs always on the hunt for more bandwidth, so there is a demand for raw network space.

“Realistically I wouldn’t expect them to sell to the end user,” he said. “I’d expect them to remain a wholesaler. They don’t have last-mile access. They might sell a coast-to-coast OC-3, but they won’t be putting T-1s in everywhere.”