Equant goes for wireless but Europe declares war on mobile operators - Company Business and Marketing

CommunicationsWeek International, July 16, 2001 by Joanne Taaffe

France Telecom's new fixed and mobile operators, Equant and Orange, are integrating their international services for enterprises in what is set to be an industry first for global managed services.

Equant merged with Global One at the end of June. But the plan to integrate systems and services with Orange, which was not disclosed at the time, shows just how ambitious France Telecom is for its new portfolio of business telecoms operations.

"[Equant] will... provide not only fixed voice and data, but also mobile and integrated fixed-mobile," said Pirjo Ojala, senior director of mobile, Equant, based in Paris.

"On the wireless side, [mobile operators] have all been making moves towards wireless [virtual private networks], but integrating with fixed? I'm not sure anyone is doing that," said Declan Lonergan, wireless analyst at Yankee Group Europe, London.

Indications are that users would at least like the choice of being able to purchase integrated fixed and mobile services, according to John Sale, sales development director, EVUA Ventures.

But some analysts have doubts about just how many corporates want worldwide fixed and mobile integrated services. "I have a question mark against the demand and user benefits," said Yankee's Lonergan.

But there is little doubt multinational corporate users are frustrated by existing pan-European mobile services and pricing.

"There have really only been half hearted attempts [on behalf of operators]." said Colin Mackenzie, leader, wireless special interest group, European Virtual Private Network Users Association (EVUA), and director of telecommunications at Andersen, in London. "Whoever gets it right will [do well]. Vodafone has tried, but it needs to do a lot more. It won't move until France Telecom [does]."

So far, the new Equant only has set out signposts indicating what it wishes to achieve with Orange over the next 18 months. The process will culminate in global billing for international mobile and fixed services. The first fruits of integration will be available in the third quarter of this year, explained Equant's Ojala at an EVUA meeting in Helsinki last month.

Apart from aiming to provide end-users with a single contract, a single bill and a single global account manager, the Equant/Orange tie-up will also offer on-net pricing for mobile-to-mobile and mobile-to-fixed calls; international short-numbering and carrier-grade interconnection to mobile networks (see box, p.25).

Some question whether Equant can offer mobile services to equal its fixed offering. "For me, Equant is a top gun [when] it comes to serving enterprises on a global scale," said Ed Vonk, telecoms development manager, Shell Services International B.V., of the Hague. "[But I] don't see how Equant can add mobile to its portfolio [at] the scale they operate at this moment."

But Equant's strategy highlights the paucity of available international mobile services for large enterprise users. And Vonk said that there is an opportunity to provide support for mobile users through local access points to the Equant global network as well as support for international mobile-to-mobile, mobile-to-fixed and fixed-to-mobile calls through a virtual roaming service.

The EVUA, which is deeply unhappy with the cost of international mobile services and a lack of global account management and contracts, is developing mobile bench-marks, which will be published every six months. The benchmarks will compare the largest mobile operators' tariffs for international calls and international roaming.

"We want to rattle some cages and to get some pan-European services," said Sale.

Analysts believe the EVUA has a hard slog ahead of it. "Are they expecting to get a response? It's a noble objective, but to get consistent comparisons...will prove difficult," said Yankee's Lonergan.

Earlier this year, the EVUA set out a request for information on international mobile services in seven European countries and the US to the largest European mobile operators: Deutsche Telekom, BT, Orange and Vodafone. Orange did not reply to the RFI because it was still piecing together its offer with Equant. The other operators' replies were fragmented and did not cover all the countries cited.

"We want to get into a single contract... The target would be a single mobile deal irrespective of traffic," said EVUA's Sale.

And operators' responses only related to countries where they had shareholdings, which the EVUA deemed unacceptable. "Responses were only based on shareholder interest. I don't give a stuff about shareholding interest... What we're looking for is service relationship agreements," said Sale.

Equant's Ojala said the company intends to extend mobile contract coverage to non-Orange partners and said Orange could cover 50 countries by 2005: "We will seek partners where Orange is not present," she said. "We don't intend to limit to shareholder coverage."

But Ojala does not pretend that the process will be easy: "[It] would be unrealistic for us to say integrate any mobile operators in world. [But we] don't want to say only and always Orange," she said.