Commodity dark fibre services make it easier for customers to switch providers.

EUNetworks launched a range of fibre-based WAN connectivity services last week, but it may struggle to win and retain corporate customers, despite being able to offer cheaper Gigabit Ethernet links between European cities, according to some industry figures.

Telcos including BT Global Services and France Telecom (Equant) already offer combined metropolitan area network (MAN) and long-haul fibre networks that provide end-to-end connectivity spanning both long-haul and last-mile. And some question whether EUNetworks has the staff and datacentre resources needed to offer the hosted services that corporates now demand.

EUNetworks is focused on dark fibre, widely regarded as a commodity market. Clients often use their own dense wave division multiplexing (DWDM) kit, which limits the revenue EUNetworks can make from leasing them hardware and hosted services, and means customers can easily switch providers if they find a better deal.

“The market has moved since three years ago, when 50 percent of multinationals were looking for DIY solutions [based on dark fibre]; most are now looking to outsource and use hosted solutions,” said a spokesman for rival carrier BT Global Services. “At this stage EUNetworks is a very small firm with a turnover of around E20m, so it can be very competitive. But the investment required on top of the major infrastructure is significant, it’s not something you can build up overnight.”

Dana Cooperson of analyst company Ovum said, “Whether EUNetworks can cut costs to half, given marketing and other expenses, remains to be seen. For any potential customer, the devil will be in the detail.”

EUNetworks’ infrastructure is based on the 50 percent of Viatel’s long-haul capacity linking Europe and the US that it bought earlier this year. This will connect 14 fibre-based last-mile MANs in major European cities, which it acquired from Metromedia Fiber Networks in 2003.

The extent of EUNetworks’ reach is also an issue – the company will not complete its fibre rollout connecting points of presence (POPs) in the City of London and the Isle of Dogs until the middle of next year.