Tinet sees strong growth with wholesale-only Ethernet strategy

CEN Feature (Jun 15 2010)

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   Ethernet is one of just two core technologies—along with IP—offered by Tinet, a carrier headquartered in Italy that operates globally.  What makes the carrier even more unique is that its business model is 100 percent focused on the wholesale market.

    

   The company has seen strong growth with an offering that has strong appeal to local and regional carriers that want to be able to offer connectivity outside their home regions.

    

   “We have network-to-network agreements with last mile carriers and by leveraging relationships with the last mile providers, we can come up with an end-to-end Ethernet offering,” explains Paolo Gambini, chief marketing officer for Tinet. “We don’t sell to the corporate space. We’re positioned as an enabler for the local and regional service provider that doesn’t have an international footprint to enable them to deliver international access to their customer, rather than losing part of the deal to an international carrier."

    

   Tinet sees itself as a “challenger” that helps other carriers that are also pursuing a challenger strategy, Gambini says.

    

   The company got its start about 10 years ago as the carrier arm of Tiscali Group, a group of 15 European Internet service providers. The Tinet unit initially provided international backbone connectivity for companies in the group.

    

   In 2002, the Tinet unit embarked on a plan to sell IP transit and Internet services to the wholesale market—and Gambini says the tight focus is what has made the company successful. “We don’t compete with our customers,” Gambini says, “and we have a great deal of experience in delivering and supporting Ethernet.”

    

   Some industry observers are skeptical of a wholesale-only approach, arguing that the margins are too narrow. But Gambini says that although Tinet cannot charge a wholesale customer as much for a connection as it would charge a corporate customer, its costs are also lower. The company has a staff of just 125 around the globe—a reality that also makes it easier to maintain a consistent corporate culture, Gambini says.

    

   An Ethernet-centric strategy also enables Tinet to minimize network costs. The carrier typically leases 10-gigabit wavelengths, to which it adds its own equipment.

    

   Tinet does substantial business in North America, as well as in Europe and the Asia Pacific region. Moving forward, the company hopes to expand more to Tier 2 and Tier 3 markets in the U.S. and is also looking at some parts of Latin America, Eastern Europe and Southeast Asia, Gambini says.

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