Reliance Globalcom Seeing Increase in Carrier Leasing

While so many other service providers are telling hard luck stories these days, Reliance Globalcom has good news to share, the company’s CMO Keao Caindec told xchange today. The India-based company, whose network spans the globe, is seeing a significant uptick in leasing from other carriers, especially in the Americas.

Reliance — the company that was created from the combined assets of subsea cable operator FLAG, managed services provider Vanco and Ethernet service pioneer Yipes — saw a 25 to 50 percent increase in the amount of interest in leasing, and an increase of around 25 percent in actual leasing sales in the fourth quarter of 2008 as compared to the same quarter in 2007, Caindec estimated.

“At this point of the year, they have seen a 25 percent increase in leasing and are expecting that number to rise to 50 percent by March of 2009,” according to an e-mail to xchange from Reliance spokeswoman Stephanie Park. “Specifically, a lot of carriers are interested in reaching Dubai, which has emerged as a financial center in the Middle East, and India, which houses a lot of outsourced customer call and development centers. It used to be very expensive to get there and carriers were using basic Internet VPNs. Now, many are working with Reliance, which has quite a lot of infrastructure in the Middle East, and using a more reliable technology to connect.”

According to Caindec, the increase in leasing he described includes a range of leased, traditional circuits starting at DS3 rates, as well as Ethernet private line. He added that Reliance also is seeing growing interest in Ethernet NNI, which he said can help carriers decrease provisioning costs.

And demand for cable capacity continues to grow, added Caindec. “Certainly in the emerging markets we’re seeing that demand continuing, and we haven’t seen a big slowdown yet in demand,” he said.

Caindec attributed all of the above to carriers’ “increasing scrutiny” related to capex. Leasing versus building the infrastructure to support connections they need but don’t have the network to support enables service providers to hold down their spending, at least for the time being, he noted.

In addition to selling services to global carriers, of which it calls 250 customers, Reliance — a company with $1.6 billion in revenue and about 1,200 employees — also serves more than a thousand large multinational enterprise and mid-to-large enterprise customers.

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