The deal, when finalised, will give Neutral Tandem a global end-to-end wholesale voice, IP and Ethernet capability, in particular supporting its ambitions in the Ethernet exchange market.
To date, Chicago-based Neutral Tandem has been focussed on providing carrier-neutral interconnect services to mobile and broadband operators as well as cable companies in the US. In June 2010, it teamed with co-location company Telx to jointly offer Ethernet exchange services in the US. It now plans to compete in the Ethernet exchange market on a worldwide basis through the Tinet acquisition, where it will be up against other exchange operators like CENX and Equinix.
Tinet specialises exclusively in IP transit and wholesale global Ethernet services. It was formerly part of the Tiscali group until its acquisition by BS Private Equity in 2009.
“Our aim in acquiring Tinet is threefold,” said Neutral Tandem chief operating officer Surendra Saboo. “It expands our reach globally, it takes our services beyond voice and further into the data market, and most importantly it extends our reach in the Ethernet exchange space, giving us a global footprint there. This is our first acquisition, and a significant one, motivated by our entry into the Ethernet market. I believe the Ethernet exchange market is changing, and moving more towards what customers are looking for, which is value. Our focus now will be on integrating with the global backbone of Tinet, which has excellent assets and a good customer base.”
“This will bring some much needed stability to Tinet since it was taken private, losing the Tiscali brand,” said Paris Burstyn, senior analyst for wholesale telecoms with the Ovum consultancy. “For Neutral Tandem, the deal does just what it’s presented as doing – expanding its reach and extending its services. Ovum believes this is a dynamic time in the wholesale market, with customers growing beyond needing and repackaging capacity to where they now purchase access, transport and managed services that they bundle into value added services like content delivery, search, social networking and other applications. The acquisition gives Neutral Tandem a foundation to build its service delivery capabilities.”
