Foreign Carriers Try to Crack the U.S. MarketForeign Carriers Try to Crack the U.S. Market

Posted: 03/2000

Foreign Carriers Try to Crack the U.S. Market

The United States, whose citizens like to call their country the land of opportunity,
has become the land of necessity for international telecom carriers.

"It has been the case for a decade or more that any carrier around the world who
wants to be a world player needs some sort of presence in the U.S.," says John
Matthews, principal consultant for Ovum Ltd. (www.ovum.com).
"It’s the biggest national market in the world, and you can’t consider yourself an
active, international player unless you’re there."

So, Who’s In the USA?

Most international carriers are in the United States. It may be only because
they need somewhere to land traffic coming into the country from the rest of the world.

Much of the time, their presence is limited to a few gateway switches in telco hotels
located in cities like Los Angeles, Miami, New York or Washington. Carriers often set up a
U.S. subsidiary, usually called AnyCarrier USA Inc., or AnyCarrier North America Inc., and
staff it with the number of employees needed to maintain the switch.

Smaller carriers do this and advertise for "our New York facility,"
referring, often as not, to a Class 5 switch–or sometimes, a certain number of ports on a
Class 5 switch–at 60 Hudson St. or 111 Eighth Ave.

Being in the United States, however, is not the same as being in the U.S. market.

Nonetheless, a few of the international carriers have burrowed into warm and cozy nests
and made a business in the country. At least one of these has used its U.S. operation as a
base to spread throughout the world. Analysts say this will continue to occur for the next
few years, even though it isn’t easy and is not expected to get any easier in the future.

The Basics: Following the Multinationals

Imagine finding yourself in a strange, dark, foreign city. You stick out among the
locals like Billy Graham at the Playboy Mansion.

You can’t find anyone who speaks your language until, from the darkness, someone asks
if you’re lost.

You recognize the accents of home. You’re not lost any more, you think.

Trying to enter the U.S. market from the dark recesses of a telco hotel can be a little
bit like that. One of the first steps a carrier might take is to exploit whatever
connection it can among multinational corporations from its home country or among the
multinationals with a substantial presence in its home country and the United States.

Thus, Telstra Inc., the U.S. subsidiary of Telstra Corp. (<ahref="http://www.telstra.com">www.telstra.com

), the Australian telecom giant, provides
private line and other services to Australian firms with offices in the United States and
U.S. firms with substantial installations in Australia.