Concert agreement opens door to 44 new providers

More than 40 telecommunications service providers could enter New Zealand via the newly formed partnership between Clear Communications and British Telecom subsidiary Concert. The strategic frame relay agreement allows Concert's 44 international distributors to gain a foothold in New Zealand. Also waiting in the wings is an agreement between Clear and Concert's Internet service, Internet Plus, and an agreement linking the voice network to Concert's global VPN (virtual private network). But the deal is shadowed by BT's failure to buy MCI, which has raised questions of Concert's ongoing commercial viability.

More than 40 telecommunications service providers could enter New Zealand via the newly formed partnership between Clear Communications and British Telecom subsidiary Concert.

The strategic frame relay agreement allows Concert’s 44 international distributors to gain a foothold in New Zealand.

Also waiting in the wings is an agreement between Clear and Concert’s Internet service, Internet Plus, and an agreement linking the voice network to Concert’s global VPN (virtual private network).

Last week’s deal comes under the shadow of BT’s failure to buy MCI, which has raised questions of Concert’s ongoing commercial viability.

Colin Spence, vice-president of commercial development Asia-Pacific for Concert, dismisses any notion that there will be a change in direction.

“While MCI is indeed leaving the family, BT has the option to buy the remaining 24.9% of Concert from MCI if it chooses,” says Spence.

“Concert is the central point of BT’s global strategy, and at the end of the day we have 3400 customers in more than 50 countries, and we have revenues of $US2 billion a year, so I don’t think you’ll see any change at all.”

The deal will enable Clear to sign up customers with heavy local and international requirements.

Clear will then be able to use the infrastructures that Concert has in place by way of agreements with overseas carriers and integrate the local and international services.

Says Spence: “You make one order, you get one bill and if anything goes wrong you only have to deal with one person. While Telecom and Telstra already offer frame relay services, they won’t be able to match the services that we are offering.”

The terms of the agreement have not been made public but pricing will be based on a benchmark figure supplied by Concert. Clear will then add the appropriate margin. Services are sold wholesale to Clear, which will then on-sell them at retail rates.

Spence wouldn’t be drawn on how on how Clear’s heavy investment on the local IP market would be affected if the voice network was linked to Concert’s global VPN.

The deal calls into question a non-exclusive packet service arrangement that Concert has with Telecom. The arrangement with Clear is exclusive and, says Spence: “is valid for the next three years”. As such the arrangement with Telecom will certainly be looked into.

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