Cable & Wireless has launched two services enabling multinationals to migrate national and international voice and data needs to IP-based networks.
The operator says customers can expect some cost savings, but that the main benefit will be having one point of call for establishing IP connections between more than 60 countries.
C&W's new offerings are Premium Intranet, an end-to-end IP virtual private network service, and Web Connect, which arranges Internet access for a company's various offices worldwide.
How much customers will save depends on how much of their voice and data they migrate to IP, said Robin Crowther, manager of IP services at C&W.
"I would expect customers to get some saving, but it's comparing apples with apples - if they've got a leased line network today I'd expect some saving, but we don't know if they're moving to an identical map," said Crowther.
Analysts say cost saving is not the key issue for VPN customers. "At the moment a lot of VPN services are going less for cost savings and more for increased convenience offerings," said Philip Codling, technology consultant at Datamonitor.
"It's pretty difficult to set up a VPN over the public Internet, so a lot of services are being pitched as premium VPN services," said Codling.
Other operators with IP VPN services include Concert and Global One.
Bandwidth prices are falling fast. Figures out last week from Datamonitor show bandwidth prices dropping by 90% between 1998 and 2000, and a further 97% between 2000 and 2003.
Falling bandwidth prices will challenge operators according to Ian Taylor, product manager of Web services at C&W.
"The challenge to us is making sure that we maintain our customer base, our value to the user, and keep providing these services," said Taylor.
Future offerings from C&W will include routing intranets over the public Internet and offering IP fax and voice services, according to Crowther.
Cable & Wireless already offers IP fax and voice in the Caribbean.
Pricing for the VPN service is on a flat rate, excluding the costs of the last mile. The service guarantees a maximum round trip delay - the time taken by a packet to travel to its destination and back - of 250 milliseconds and a packet loss rate below 1%.
C&W claims to have several customers for its VPN service, which it cannot name.
C&W's global IP infrastructure has recently been bolstered by its acquisition of MCI's Internet backbone in the US and of Internet businesses in Europe and Asia.
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