Telcos search for value-added nirvana

Telcos search for value-added nirvana

Telecommunications deregulation has opened the floodgates for eager telco resellers to enter the fold, but one thriving new business concedes the practice of adding value remains the industry's biggest challenge.

Bill Liao, director of self-proclaimed data reseller Davnet, said the only way data and voice resellers can add value is by offering access to "enabling technologies" such as videoconferencing.

"For us it's easy because we have a broadband switched network," he said.

Liao explained the challenge for telecommunications resellers is not to compete on a cost basis, but provide customers with access to integrated voice, data and content-based services.

Davnet uses an interconnection arrangement with Telstra to offer the corporate market access to high-speed, low-cost data communications in addition to a range of Internet, aggregated voice and data services.

The company's customers are typically tenants of prestigious office towers in the Sydney and Melbourne CBDs where one building shares bandwidth on building-wide virtual private networks (VPNs).

The company uses wireless rooftop links to connect the buildings using wireless links carrying data at speeds of up to 1000Mbps over a 6km line-of-sight distance using lasers.

The company is riding a wave of "massive growth", Liao reports, with its most recent example being the late May announcement of its intention to buy telco reseller QAI Australia.

Davnet informed the ASX it offered $6.20 per share to fully acquire QAI, a switchless reseller of local and long distance telephony services.

Davnet's growth streak also includes the acquisition of ISP Magna Data in February valued at between $20 and $30 million.

According to Liao, the merger gave Davnet access to Magna Data's 4000 corporate clients.

Aside from the acquisitions, Davnet is moving to secure its future through provision of value-added services such as Reuters, Bloomberg, and "industry-specific providers".

Davnet's backbone network is built using technology from Xylan, Cisco, and Newbridge.

When asked about the future of integrated voice and data technologies offered by such vendors, Liao quipped: "We're the network that makes their technology a reality."

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