WorldCom - Company Operations

Telecommunications, March, 2001 by Mathew Secker

WorldCom is in the midst at a major realignment of its businesses. The global service provider (GSP) announced in November last year that the company would separate into two distinct businesses. While WorldCom has remained the name of the company, it has created two separately traded tracking stocks. The first, WorldCom lnc, will reflect the performance of the GSP's core high-growth data, internet, hosting and international businesses. The second, MCI, will echo the performance of its high-cash flow consumer, small business, wholesale long-distance voice and dial-up internet access operations. "Realigning WorldCom's structure in this way will enable the respective businesses to achieve greater management and resource focus to execute business strategies that work most effectively for each," said Bernard J. Ebbers, WorldGom president and CEO.

WorldCom began operations in 1983 in Hattiesburg, Mississippi, US. Formally MCI WorldCom, the GSP today offers voice services over its metropolitan, national and international network infrastructure. Through its UUNET unit, the company offers data services to businesses over its extensive global internet backbone. WorldCom has established itself as a local network facilities-based competitor in over twenty-one countries throughout Europe, North and South America, and the Asia-Pacific region. Telecoms services in these countries account for three-quarters of the estimated $800 bn ([epsilon]855 bn) global market. The company went public in 1989, and through a series of more than sixty five acquisitions has grown into a US$36 bn ([epsilon]38.5 bn) global communications company (based on 1999 revenues), with more than $15 bn ([epsilon]l6 bn) from high-growth data, internet and international services.

WorldCom has recently launched a new worldwide advertising and branding campaign targeting the new digital generation or 'generation d'. This campaign has been implemented to promote WorldCom's long-term key strategy to become the 'pre-eminent facilities-based global telecoms company for e-business and digital services'. It plans to do this by providing data services and expanding its role in internet transport and related IP services.

Network reach

WorldCom's global network comprises 70,000 route miles(112,651 kin) and has high-capacity connections to more than 50,000 buildings. The company claims that it is presently involved in almost every undersea cable route in the world. It also says that its UUNET unit has an internet network with over 2,500 points of presence around the globe, offering connectivity in more than 125 countries.

In North America, WorldCom is the second largest long distance provider in the US (behind AT&T) with a 56,000 mile (90,104 kin) fibre-optic network. In the US, World-Com also has over 100 fibre-optic-based, high-capacity local city networks with direct connectivity to more than 44,000 office buildings. The company says that its seamless North American network offers integrated services spanning Canada, the US and Mexico. In Mexico, World-Com's strategic alliance with Grupo Financiero Banamex-Accival -- called Avantel -- has grown to provide service to more than one million customers.

WorldCom was one of the first companies to complete a pan-European high-capacity network combining both local and long-distance elements. The company also says that it has more than quadrupled the original size of its all-fibre, high-capacity pan-European network to nearly 9,900 miles (15,929 km). The company also holds a 50 per cent ownership in two high capacity trans-Atlantic undersea cables, enabling it to seamlessly connect to over 45,000 buildings in the US and Europe.

In other markets, WorldCom maintains nineteen offices throughout the region of Latin America and has direct investments in companies in Brazil and Venezuela. The company's global network includes ownership in the major cable routes from the US to Latin America and sixteen satellite earth stations in the region. WorldCom holds a controlling interest in Embratel, the only national network in Brazil. SkyTel, a WorldGom company, also announced an agreement last year to expand two-way wireless communications solutions to Latin America.

The high-growth market of the Asia-Pacific region is crucial to WorldCom's long-term global network strategy. Indeed, the number of internet users in the Asia Pacific region is second only to the US and is expected to take over western Europe sometime this year with a total of 36.8 million users. WorldCom 's revenue growth reflects this, with a year-on-year increase of more than 100 per cent in the region: To meet demand, WorldGom has expanded its high-capacity fibre as well as building fibre-optic undersea cables. The company has also invested heavily in the first self-healing broadband fibre-optic submarine cable in Asia -- APCN-2. It has also invested in Southern Cross Cable and the Japan-US terabit cable system. WorldCom was recently awarded a licence to compete in Japan's domestic and international voice and data services market. It has also completed a local network in Tokyo and is currently constructing a network in Osaka. The company now has a presence in ten countries in Asia Pacific. Due to liberali sation that has continued to gather pace in the region, WorldCom is trying to capture a share of each market opportunity.