Verizon Business Unveils Merger Progress since the January 2006 Verizon Acquisition of MCI

November 1, 2006 - When Verizon completed its acquisition of MCI in January 2006, the carrier combined the enterprise-focused lines from both companies to form Verizon Business, a carrier that shares the top spot nationally with AT&T and vies for multinational accounts with the world's major global providers.

The newly formed Verizon Business carried forward MCI's established practice of sharing detailed roadmaps of the carrier's vision and goals with the industry. In late October 2006, Verizon Business hosted an industry analyst conference where it unveiled both the progress that has been made and the work that is still either ahead or underway – presenting an accurate snapshot of just how far the provider has come during the nine months since the merger was finalized.

Click here to listen to Current Analysis' analysts Counse Broders, Brian Washburn, John O'Keefe and Cindy Whelan discuss the progress Verizon has made.

Counterpane Says ‘allo’ to BT in Security Merger Move

On October 25th BT announced that it would acquire Counterpane, adding the managed security services firm to its stable of global professional capabilities. The acquisition will help BT benefit from Counterpane’s security management technologies and be able to deliver to its global customers a proactive managed security service with auditing and reporting capabilities.

Recommended Competitive Responses

► SAVVIS will need to step up their efforts in the managed security sector. While they acquired a solid group from their Cable & Wireless acquisition, they’ve done little to expand and capitalize on this group.

► IBM needs to tout its acquisition of ISS assets that included ISS’ global footprint and presence as well as multinational clients.

► Cybertrust should tout its 2005 global merger of Betrusted, Ubizen and TruSecure that brought together the assets of all three companies to offer clients a true end-to-end security solution that includes Ubizen’s Identity Management solutions.

► AT&T should promote its ownership of one of the world’s largest networks in which it has a long, rich history of providing security services with in-house expertise and ability to control pricing and scalability to bring its solutions down-market to the SMB market as well as the Fortune 100.

Recommended End User/Customer Responses

► Potential customers should inquire about the timetable regarding migration and integration for this merger. While BT has integration experience with past mergers and in the short term plans to operate BT Counterpane as a subsidiary, there are the risks of disruptions that these changes can evoke.

► Customers should be pleased with the greater access to resources, channels and client contacts, especially the opportunity on a global basis and in the U.S. for these services and its other professional services such as IP VPN.

► Potential customers need to perform due diligence and compare pricing and services from global providers such as IBM/ISS, Cybertrust, AT&T, Verizon Business and Symantec.

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Time Warner Closes Its Acquisition of Xspedius and Gains Key Metropolitan Network Facilities

On October 31th Time Warner Telecom completed the acquisition of Xspedius Communications, an integrated communications services provider with a metro fiber presence. The acquisition enhances Time Warner Telecom’s ability to provide last-mile connectivity to enterprise customers, offering it the opportunity to expand its growth in this market segment.

Recommended Competitive Responses

► Level 3 can emphasize that its new Metro Services business will cover more markets and have nearly twice the amount of metro fiber that Time Warner Telecom has after the merger.

► CLECs that target SMBs can position Time Warner Telecom as a company with a first priority of serving large enterprises and imply that the carrier will not expend much time or money in developing services and bundles for SMBs.

► CLECs that are not in the midst of an acquisition or integration can emphasize their stability over carriers that are experiencing the disruption of an acquisition and integration.

► Cable TV providers offering business services can step into the breach and point out that they also operate large fiber footprints, complete with the availability of sophisticated voice and data services.

Global Crossing Increases Latin America Reach through Acquisition of Impsat

On October 26th Global Crossing announced that it intended to acquire Impsat, a Latin American service provider. Impsat has a presence in seven Latin American countries, and will add 4,500 customers to Global Crossing’s customer base.

Recommended Competitive Responses

► Telefonica can promote itself to enterprise and wholesale customers as a reliable partner, a global carrier with a base in Europe and a long-established presence throughout Latin America.

► Other regional competitors can position Global Crossing as a U.S.-based company that is overtaking a much smaller regional carrier.

► Competitors can position the acquisition as a move by Global Crossing to jump onto the consolidation bandwagon rather than a key strategic move.

Recommended End User/Customer Responses

► Impsat’s wholesale and enterprise customers should maintain close contact with account managers to find out what additional services the combined carrier will be offering. There may be an opportunity for these customers to see some network savings by consolidating services to one global carrier rather than relying on multiple carriers for in-region and out-of-region services.

► Global Crossing’s enterprise and carrier customers that have been using other carriers to meet service requirements in Latin America should contact the carrier to understand what services will be offered in each country, when the services will be available through Global Crossing and what the costs will be, to see if it makes sense to move their services onto Global Crossing's/Impsat's networks.

► Multinational companies located in the U.S. or Western Europe should monitor progress on the integration and check out pricing and availability of services to see if the carrier can offer coverage that is competitive with other established carriers in Latin America, and with other major global carriers.