Tata Communications makes global push into low-latency services segment

Tata Communications (NYSE: TCL) is making a global splash into the burgeoning low-latency market segment with a service targeting major financial hubs in Asia, the United Kingdom and the United States.

To build this network, Tata took a different route than it typically takes to deliver services. While the service provider has a well-established set of submarine cable systems--including the Tata Global Network-Eurasia (TGN-EA) cable system--in this case, it is using various "unprotected" routes from other partner service providers.

By leveraging unprotected routes, a service provider can eliminate the issue of protection switching.

"If you're on a protected link and the link is switching every 30 seconds because it's in a flapping situation it will wreak tremendous havoc on the network because it's converging every 30 seconds," John Hoffman, head of Ethernet Product Management at Tata Communications, said in an interview with FierceTelecom. "If they get unprotected they can decide how quickly they don't reconverge and then they have more control of the network and ensure the second path is diverse and the best possible latency you could get."

However new the service is, the service provider is leveraging the same Provider Backbone Bridging (PBB) technology it uses to deliver its traditional point-to-point and point-to-multipoint Ethernet services.

Participating customers can take advantage of features such as non-disruptive instant bandwidth upgrades and near-real-time latency guarantees. It said it measures latency every five minutes on a 24/7 basis, up to two decimals after the millisecond range from point-of-presence ("PoP") to PoP.

Hoffman said that while the service provider may be a bit later to the low latency game, the advantage is the reach of its offering.

"We're not exactly the first movers on this as there have been a number of competitors that have done low latency in region, but we're one of the few that have done it globally," he said. "The reason we think we'll have some success in this that is this network is a new network that's built on our existing platform, meaning that the same Ethernet services we sell on our standard network we're selling on our low latency network including point-to-point and point-to-multipoint services."

Hoffman added that having the point-to-multipoint option provides a better cost structure for financial companies over buying multiple point-to-point links. In addition, Tata can provide a multipoint network that spans the low latency and the standard network together.

"A customer could be using multipoint to do trading and have it connected into a back office location for clearing and have it all together on a single network," he said.

While it's clear financial companies that are willing to pay a premium for low latency services, there are plenty of other opportunities for this service, particularly in the pharmaceutical and IT services space.

"At the point that we upgraded our PoPs in London and Chicago to support this network, the Banking, Financial Services and Insurance (BFSI) segment was the main driver of the low latency networks and they are still are today, but we had inquiries outside BFSI that are not doing trading," Hoffman said. "We had conversations with a pharmaceutical and an IT services companies who are telling us that they are running an application that's critical to their business that they want it as near real time as possible or they are saying newer applications are less latency tolerant."

For more:
 - see the Tata Communications release

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