U.S. Metro Ethernet provider heading north

  Canada’s financial sector has received praise around the world for the way it avoided the worst of the banking crisis that seized many nations.

That in part is why an American provider of fibre-optic transport solutions will open a Toronto office at the end of May.

 “Certainly the strength of the financial sector in Toronto added a lot of impetus in this [decision],” said Felipe Alvarez, president of RCN Metro Optical Networks.

“It think it will be one of the leading markets in North America.”

 It will be the company’s first step outside the U.S.

The Herndon, Va.-based company, a division of RCN Corp., has a network that stretches from New York to Washington, D.C. to Chicago, counts as clients a number of Canadian-based financial institutions who have U.S. branches.

A number of those clients suggested they’d be willing to buy service from RCN if it came north, Alvarez said. “When you look at the fully guaranteed performance and the amount of connectivity we have within the financial services community, we believe we’re going to attract a lot of attention, a lot of traffic. That will allow us to compete and win in the Toronto marketplace.”

Initially, RCN will target its existing client base, plus U.S. companies that need connectivity to get to here.

In addition, it believes there are other opportunities to sell connectivity to others sectors it aims at, including healthcare, media and government. “There are significant Canadian companies that need Metro network to distribute and aggregate traffic in the U.S., so we’re making a play into that area, also.”

The city is not lacking in connectivity. Iain Grant, managing director of the SeaBoard Group, a Montreal-based telecommunications consultancy, said that the price of service from Toronto to points south at the moment are “quite aggressive.” On the other hand, he said for some customers factors such as quality of service are more important than price.

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In its first stage, RCN will lease fibre capacity to connect to its U.S. network. If all goes well, Alvarez said, it might build a network in the Toronto area. It will also offer co-location service from space leased in Switch and Data Facilities Co.’s data centre in Toronto’s downtown. However, it won’t have a sales staff here. Servicing of the co-location space will be done through a local company.

Toronto is one of up to five cities RCN will expand to this year. Earlier this month it announced it will design, build and manage a 350 mile fibre network over three years to connect Cape Cod to other parts of its network in Massachusetts.

It offers switched and “burstable” Ethernet, Sonet, a private wavelength network, video transport, Internet and other services.

Although its network goes as far north as Burlington, Vt., Alvarez has no immediate plans to expand to Montreal.

Alvarez wouldn’t say what his revenue goals are for the first two years of operation here.

Service will start May 31, which will be advanced with a marketing event May 14.

“We’re looking forward to this,” Alvarez said. “We expect to be highly successful in Toronto. We did very well last year in terms of growth in a very difficult economic environment, and we expect to do even better this year.”

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Howard Solomon
Howard Solomon
Currently a freelance writer, I'm the former editor of ITWorldCanada.com and Computing Canada. An IT journalist since 1997, I've written for several of ITWC's sister publications including ITBusiness.ca and Computer Dealer News. Before that I was a staff reporter at the Calgary Herald and the Brampton (Ont.) Daily Times. I can be reached at hsolomon [@] soloreporter.com

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