EarthLink's Alterman: Diverse routes, new products sets apart its wholesale strategy

EarthLink and its predecessor companies may have been part of the speculative fiber buildout boom of the late 1990s, but the provider still feels that its alternative construction approach will set it apart in the wholesale services industry segment.

Speaking to investors during the Jefferies Technology Conference, Louis Alterman, CFO of EarthLink, said that even as legacy parts of the wholesale business continue to decline, the unique network routes it has will enable it win new business.

"In carrier transport, it's a tale of two cities: some of the legacy wholesale stuff like 800 minutes and voice traffic is declining and is becoming a smaller piece of our business while transport has seen tremendous growth," Alterman said. "The amount of bandwidth that needs to be transported is growing exponentially and pricing is falling, but the net of those two things for us has been positive because we have unique routes that were built in a different way."

Unlike other companies that used railroad rights of way, EarthLink used tower company rights of way that route around congested areas of the United States.

"We can get you to point A to point B in a different way," Alterman said. "Even as transport growth might moderate in the future we still think we have a benefit from having unique routes."

Having diversity on the network is becoming a growing concern for all of EarthLink's carrier, content and even enterprise customers that purchase wholesale bandwidth.

"If you look at what people are doing on the internet, whether it's You Tube or Facebook, it does not mean that all of the overbuilding that happened a couple of decades ago means we saturated every piece of fiber that's out there," Alterman said. "Route by route, you can find places where there's demand and as companies realize that they want to protect their network to get to Atlanta to Miami or to Ashburn, Virginia, they have to have diversity."  

Carriers are only one part of EarthLink's wholesale strategy. The service provider has instructed its sales force to sell lit services like dark fiber and wavelength services that will scale from 1 Gbps to 100 Gbps to not only carriers, but increasingly to content companies and enterprises that have a desire for higher bandwidth services.

"We took over 90 percent of our sales reps and said 'you can't sell the legacy telecom stuff but you can sell transport and we're going to comp you on transport only,' and that's been a huge differentiator," Alterman said. "They're not just selling to other carriers, but now they are also selling directly to enterprises."

EarthLink has done a number of things in the recent quarter to realign and improve the wholesale business.

Following the appointment of David Zimmer as it SVP of carrier services, the company continues to innovate on the product side, introducing two new wholesale service capabilities just this week.

One of its first moves was to increase the reliability of its carrier transport services by adding capacity and GMPLS technology. By using GMPLS, EarthLink says it can direct traffic and allow nodes to fail-over and self-heal in case of unplanned network events. Specifically, GMPLS provides a greater level of reliability if a fiber cut occurs even with unprotected service.

Besides ensuring greater reliability, EarthLink has improved installation intervals, shortening delivery times by 30 percent or more. The service provider plans to offer expedite orders on all transport products and will only charge an expedite fee if the install is faster than the standard interval timeframe.

On the product front, EarthLink is giving wholesale customers the ability to leverage its Ethernet, broadband, wireless, DSL and TDM access capability across its nationwide footprint. Nationwide internet for carrier customers will be available in July, with quoting available mid-June.

"What we're offering our retail customers is applicable in the wholesale space," Alterman said. "We're making some of those retail products can be sold on a wholesale basis and we think that will be the next opportunity for growth in that business."

For more:
- listen to the webcast (reg. req.)

Related articles:
EarthLink says one-box approach will differentiate its SD-WAN service from competitors
EarthLink focuses dark fiber sales on enterprise customers, will de-emphasize TDM-based products
EarthLink, Level 3: EoHFC can't satisfy business customers' dedicated bandwidth needs
EarthLink to begin offering turnkey SD-WAN solutions in Q3 this year

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