Datacoms service supplier Infonet likes to stress that it is a true VAN (value-added network) vendor rather than just another telco carrier. Value-added data services currently account for nearly all of its revenues its says, in contrast to the situation at rival Equant where 60% of business stems from the supply of standard network operations.
Over 30% of the world’s leading multinationals now depend upon Infonet Services Corporation to provide global data communication services, the El Segundo, California based company claims. Measured by the number of Forbes’ Top 100 and Business Week’s Global 500 multinationals using Infonets’ services this represents the third consecutive annual increase in the company’s share of the global data services market. This is currently growing at a rate of 20% annually according to data from The Yankee Group.
Infonet with revenues of $440m in 1998 and 2,200 employees is one of the larger players in this high margin sector of the telecommunications industry. Other horses in the race include the Global One consortium and Dutch telecommunications giant Equant N.V. Global One recorded $1.1bn in revenues for 1997 and has over 4,000 employees. Equant meanwhile recorded $529.1m in revenue for 1997 representing an annual growth rate of 5.4%.
The growth in this sector follows the tidal wave of global deregulation of the telecommunications industry. At present it would seem that none of the major players are strong on all five continents. Infonet with ‘enough circuitry to wrap the world 25 times’ is said to be particularly strong – in terms of coverage – in Europe and Asia Pacific and average in Latin America and Africa. Analysts at Meta Group still rate Infonet as ‘poor’ in terms of its coverage in the US. However, the company can boast an impressive client list of multinationals that includes such notables as Nestle, Thomas Cook, Smith Kline Beecham, Volkswagen, ERP vendor SAP and Deloitte & Touche.
Established in 1969 the company is privately held by a number of telecommunication companies including KDD, PTT Netherlands, Swisscom, Telefonica, Telia and Telstra. Infonet’s operations are divided into six categories. Its ‘World Network’ provides global wide area network (WAN) connectivity enabling organisations to create global intranets and extranets using Frame Relay and IP and X.25 networks. Since 1993 Infonet has offered Internet access as a component of its dedicated Internet Protocol (IP) services. Dubbed ‘Global Internet Services’, it offers global high bandwidth dedicated lines and dial up access. Its ‘Global Intranet Services’, uses TCP/IP, Internet and web technologies to provide organisations with information-sharing capabilities and electronic processing, supported by an advanced portfolio of access security, web hosting and encryption services.
Infonet’s claim to being a true VAN is justified off the back of services such as its ‘Application Workplace.’ This is a combination of managed back office services for messaging, collaboration (Notes and Exchange) and e-commerce applications, integrating local and regional services into a single global managed solution. With its ‘Value-added Services,’ Infonet offers Remote Access with global roaming, providing options for meeting the data communications needs of each location; and Multimedia Services offering integrated voice, fax working. Finally, Infonet’s ‘World Support Services,’ offers in-country local service and support operations in 59 countries including circuit procurement, training services, installation support, help desks, network operations, and facilities management.
Infonet’s poor showing in the US may be seen as a mortal weakness for no other reason than that it greatly diminishes its visibility. However it continues to strengthen itself where it already has a strong presence – most recently it has expanded into Russia, Thailand and Turkey. In an industry characterised by alliances rather than by predatory acquisition, Infonet’s mixed parentage would suggest that its future as a player seems secure
