BellSouth and Commerce One Launch Joint Venture to Build Global Internet Marketplace for Telecommunications Industry - Company Business and Marketing

Cambridge Telcom Report, Feb 28, 2000

BellSouth and Commerce One Wednesday announced a memorandum of understanding to form a joint venture that will develop an Internet marketplace for procurement in the burgeoning telecommunications industry. The companies expect to sign a definitive agreement next month. The aim is to create an open electronic exchange to link buyers and sellers of goods and services across the telecommunications industry throughout the world.

Both BellSouth and Commerce One will hold minority stakes in the new company. All telecommunications providers and supporting industry partners will be encouraged to join the new exchange. A majority of the equity will be held and earned by as many as six to seven major telecommunications industry partners who will be anchor tenants of the exchange. Anchor partners will earn equity based on their level of activity across the exchange and will share the responsibility for establishing the new company's strategic direction. An equity set-aside will also be established for an independent management team.

"BellSouth truly understands the power and potential of global, electronic trading communities," said Mark Hoffman, president and CEO of Commerce One. "They are doing the right things both internally and externally to legitimately declare leadership status as an e-business enabler. Our leadership in e-commerce combined with BellSouth's tremendous operational expertise and e-business commitment add a major new marketplace to the Commerce One Global Trading Web."

The exchange will initially offer procurement management functionality, reporting and analysis capabilities. The exchange will support BellSouth's overall strategy aimed at transforming its $16 billion global supply chain and reducing ongoing costs by $1 billion over the next two to four years. BellSouth and its affiliated companies plan to implement the Commerce One Solution to automate purchasing of goods and services throughout the company. The new online marketplace is scheduled to go live during the second quarter of 2000, with staffing from BellSouth, Commerce One and other partner companies.

"Our strategy with this initiative is based on collaboration throughout the industry's supply chain," added Pat Shannon, president, BellSouth Exchange Services. "We will start by building an electronic marketplace for the procurement of goods and services across the telecommunications industry. Over time we will add additional supply chain functionality that will result in further efficiencies and added value to users of the exchange, and new revenue streams for its partners. "

In addition to its supply chain initiatives, BellSouth is enabling its customers to enjoy the benefits of e-commerce. BellSouth previously announced the development of an Internet trading community for small businesses throughout BellSouth's nine-state region, based on the Commerce One MarketSite portal. BellSouth will offer a web-enabled application allowing small business customers access to global markets as both buyers and sellers. BellSouth's 1.2 million small business customers generate revenue in excess of $1.3 trillion annually and procure over $200 billion in goods and services. The Internet-based trading community for small businesses is scheduled for launch this quarter.

Wednesday's announcement is a natural extension of the work that Commerce One has been doing with BellSouth and other major corporations around the world, and represents a major initiative in BellSouth's integrated supply chain, purchasing and overall e-business strategy. Commerce One has built similar business-to-business e-commerce exchanges for the automotive industry, the petroleum industry and the information technology industry. The announcement Wednesday with BellSouth represents the first business-to-business trading community to be developed solely for the global telecommunications industry.

Commerce One is the leader in global e-commerce solutions for business. Through its products, portals and services, Commerce One creates access to worldwide markets, allowing anyone to buy from anyone, anytime, anywhere. The Commerce One Global Trading Web is the world's largest business-to-business trading community. Comprised of many open e-marketplaces running on the Commerce One MarketSite portal solution, the Global Trading Web provides unprecedented economies of scale for buying organizations, suppliers and service providers worldwide. Commerce One is located in Walnut Creek, Calif., and can be reached by phone at (800) 308-3838 or (925) 941-6000 or via the Internet at http://www.commerceone.com/.> BellSouth is a $25 billion communications services company. It provides telecommunications, wireless and wireless long distance communications, Internet and data services, advertising and publishing, and video and entertainment services to nearly 37 million customers in 20 countries worldwide. FMI: http://www.bellsouth.com/.>

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