John Macdonald, president of Allstream, Canada’s third-largest telecom company, called the company’s expanded partnership with British Telecom, announced Thursday, a “match made in heaven.”
The Allstream and BT relationship did not begin with this announcement. The two companies have been working together since 1999, mostly on the correspondent level, including the exchange of traffic, private lines and frame relays. This new partnership gives Allstream access to the global Multi Protocol Label Switching (MPLS) market that offers a different suite of applications for its customers. When searching for a company that could accomplish this, Macdonald felt BT was of like mind.
The advantage of MPLS is it allows enterprises to mix and mingle various technologies and have them converted into IP, making it faster and easier to maintain new networks. It also has packet-prioritization capabilities, allowing the most important data such as voice to be sent first.
According to Ron McKenzie, executive vice -president, marketing and business development, Allstream’s, customers were asking them to move into this area. “We see more large multi-nationals wanting to move into MPLS service because it delivers the performance and the application capability that enables to gain competitive advantage and reduce their costs.”
Chuck Pol, president and COO, BT Americas, called this partnership a natural extension of its existing relationship. “Our ambition is to be a global IT networking services company. What this gives us is a very deep reach into the Canadian marketplace and the Canadian headquartered companies.”
Currently, teams at BT and Allstream are working together at combining their existing MPLS networks together, and neither envisions any problems occurring.
The deal adds a lot of credibility to Allstream, said Elroy Jopling, principal analyst with the Canadian offices of the Gartner Group. “It has been a banner year for Allstream. The company was acquired by MTS (Manitoba Telecom Services Inc.), which gave them financial credibility. Now the deal with BT gives them global credibility and moves them one notch up as one of the carriers that can compete for the Canadian enterprises.”
He said BT is better able to access the market in North America.
Another part of the deal is it allows joint product development, such as BT and Allstream evolving network messaging services like XML, and network resident applications like RFID. Both companies said that together they could have one common suite of products on a global basis.
As well, Jopling said this deal now gives Allstream the financial capabilities to spend more on future technologies and applications.