Saturday, 19 August 2017

Major telcos form global enterprise alliance, looking for new partners

By Mary Lennighan, Total Telecom, in Barcelona
Wednesday 24 February 16

Deutsche Telekom-led Ngena initiative includes operators from U.S., India and South Korea; Cisco to act as main technology partner.

Deutsche Telekom this week unveiled a major new alliance of international telecoms operators designed to simplify the provision of multi-regional enterprise services and said it is working on adding new partners later this year. "We call it Ngena," Tim Hoettges, the German incumbent's CEO, announced at Mobile World Congress on Monday. Initially…

Deutsche Telekom this week unveiled a major new alliance of international telecoms operators designed to simplify the provision of multi-regional enterprise services and said it is working on adding new partners later this year.

"We call it Ngena," Tim Hoettges, the German incumbent's CEO, announced at Mobile World Congress on Monday.

Initially, the alliance comprises Deutsche Telekom, U.S.-based CenturyLink, India's Reliance Jio Infocomm and SK Telecom.

However, "we are in final negotiations with two handfuls," of other potential partners, Hoettges said. "Definitely I will talk to Gavin [Patterson, BT CEO] tomorrow and offer him the Ngena."

On the technology side, "our launch partner is Cisco," he said.

Ngena, which stands for Next Generation Enterprise Network Alliance, is "like a Star Alliance" in the airline sector, Sanjeev Mervana, senior director of marketing at Cisco's service provider business explained to Total Telecom on Wednesday.

An increasing number of enterprises are expanding globally and looking for connectivity and services, which can be "very cumbersome" for telecoms operators to provide, requiring them to broker multiple deals with other operators in regions where they lack facilities.

Ngena "allows the service providers and the carriers to become global," he said, much like content and Internet companies, and giving them an advantage over their competitors.

Ngena, which will be an independent company, will act as a wholesale entity, providing connectivity and services to the partners, significantly speeding up time-to-market, reducing cost, and providing greater security for enterprise customers.

With Ngena, telecoms operators will be able to deliver services to enterprises within days or even minutes, whereas under the current system enterprises could have to wait for as much as six to nine months, Mervana said.

"Ngena is going to build services," Mervana said. "It's a totally greenfield model."

The first will be IP VPN and associated services, such as security, he said. "[Globally], that market is around US$50 billion today."

The first services will launch in 2017, Mervana said. "In the next few months they are going to focus on onboarding new partners."

The alliance hopes to attract around 20 new partners by the end of 2016.

Ngena is backed by Deutsche Telekom Capital Partners, which owns 49% of Ngena, Hoettges said, while the remaining 51% is held by its management. Telco partners can buy shares in the company, and indeed, the CEO said he hopes they will all become shareholders.

The formation of Ngena is "still subject to applicable merger control clearance," Deutsche Telekom said.

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