FierceTelecom Leaders: Doug Junkins, CTO, NTT America -- Part II

FierceTelecom: Okay, we talked about international growth, but what about domestic network growth?

Junkins:
From a traffic perspective, wholesale sales drive the majority of our traffic on the U.S. network. That means selling to other carriers and ISPs as well as selling to other content providers that need access to those carriers is where we receive the bulk of our traffic. We are pushing into enterprise customers more and more. We try to balance those very large customers with a large set of smaller customers because from a business perspective you want to have a broad base of customers in order to balance your business risks.

FierceTelecom: So those smaller customers could include large businesses?

Junkins:
Yes, large businesses and some of those Web 2.0 companies. This means anyone that's looking at the 50-100 Mbps of connectivity rather than the tens of Gbps of connectivity.

FierceTelecom: You mentioned Ethernet. How is that service becoming a part of NTT America's portfolio?

Junkins:
 If you're talking about Ethernet as an access method into our network to selling IP transit connection to our network that's about where we see all of our growth. Whether it's a metro Ethernet connection or a customer that's in the same shared facility where it's a local cross connect. The only place where we are seeing TDM customer growth is in the Miami market where we have lot of South American providers that are coming across undersea cable systems and are connecting to us there. In the U.S. all of the domestic growth is Ethernet-based.

FierceTelecom: Speaking of Ethernet, another major concern to expand the service is the ability to establish External Network to Network Interconnection (E-NNI) agreements. Obviously, the Metro Ethernet Forum (MEF) put forth its E-NNI standard, but what affect does that have on NTT America?

Junkins:
From an NNI perspective, we do offer Layer-2 VPN services. At this point we're focusing more on providing those as point to point versus a Virtual Private LAN (VPLS) service. There's a service that's engineered out of our Tokyo office called global super link. It's a VPLS-like service we offer for our enterprise customers that's run on our Arcstar private business network unit. One of my challenges as CTO of NTT America is to figure out where the overlaps between the public networking and the private networking are and make them as efficient as possible.

FierceTelecom: Outside of the U.S., another big growth area of NTT America is South America. What activity do you have going on in that region, and how big of a market growth opportunity is it for NTT America?

Junkins:
It has been a very big growth area for NTT America. We've had a lot of success selling to Latin American carriers from our Miami as well our Dallas and Los Angeles facilities. In that regard, we see Latin America as a huge growth market. The next step is to do a very detailed business study to see if it makes sense to expand our own network footprint into South America.

Right now, the providers that are able to come up and buy services from IP transit providers in North America are really the one or two largest carriers in each country. There's a very large market for the tier 2 providers in each country that don't have their own cable assets to reach North America that are looking for an alternative to the local incumbent providing IP transit. We see that as a potential for a large growth for us. We have been very active down in South America to understand the costs of doing business down there are and understand what the profitability would be. That's a decision we're going to have make rather quickly. For people that want to move into South America, 2010 is the year to do it. After that it's going to become a more mature market whereas right now there's a lot of opportunity be one of the early providers down there.

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FierceTelecom Leaders: Doug Junkins, CTO, NTT America -- Part II