BellSouth To Provide National Data Services

BellSouth Monday morning announced an internetworking deal with Sprint Nextel to provide data services throughout the country.

The agreement would allow BellSouth to use Sprint's nationwide Multi Protocol Label Switching capabilities to provide service far beyond its current nine-state base. Multi Protocol Label Switching labels all data, making network management and network intelligence easier than in traditional data networks. This agreement will also move data at faster speeds than existing, lesser internetworking agreements with Sprint and Qwest Communications.

"We want to be the premier data provider for the customers we serve," says BellSouth spokesman Todd Smith. "This will allow for greater adaptation for converged services."

Verizon and SBC Communications have already gone the merger route to nationwide service, and Qwest was born out of a merger with a local carrier. So BellSouth had to find a way in to compete. Deals of the agreement weren't disclosed, but Smith says it involves monetary compensation as well as some shared-licensing agreements.

With VoIP and converged networks a wave of the future, BellSouth is now positioned to compete with Qwest and the newly combined Verizon/MCI and SBC/AT&T, which are just weeks away from FCC approval. A nationwide company that uses BellSouth at its main office in Atlanta will, starting early next year, be able to use Bell South for data in its branch offices in Los Angeles and Boston as well."This could be a significant negative for Qwest, which is currently a large provider of wholesale transport services to BellSouth," Sanford C. Bernstein & Co. Inc. analyst Jeff Halpern says, predicting that Qwest risks losing hundreds of millions of dollars in annual revenue.

Ultimately, the cable and telecom companies will be competing across the board, says independent telecom analyst Jeff Kagan.

For businesses, all this boils down to one-stop shopping. Nationwide companies have long had to go the piecemeal approach to networks, using different carriers and making for sometimes complicated network management. This won't be the case for much longer as all the major Bell companies still in existence now or will soon offer nationwide service.