Ownership changes predicted at Global One

In his most explicit statement about Global One's troubles to date, Sprint CEO William Esrey told NBC last week that Global One will soon experience "changes in its ownership structure".

That followed two other upsetting developments for the international carrier. One was the recent resignation of Global One CEO Gary Forsee, a long-time Sprint executive. The other was legal turmoil among Global One's two other owners - France Telecom and Deutsche Telekom - resulting in a lawsuit in The Hague's international court over a related tangle of partnership obligations.

But Global One officials two or three layers below the ownership level have been putting out the word that the venture continues to improve its processes, systems and services. Also, they say the venture is enjoying good growth on services such as international frame relay.

These operations officials are rolling out Global One's frame relay, ATM and IP services to an increasing number of countries. And analysts now agree that Global One isn't likely to collapse because - after many missteps - it has finally installed a true global network and gathered a strong list of multinational customers, including NATO. And this week it announced a contract with Coca-Cola for some overseas data connections.

The venture has conceded that it will continue to lose money until 2001. But it has recently decided to move away from renting international circuits from other carriers and instead has been obtaining facilities-based licences as a common carrier wherever possible.

In fact, Global One is one of the companies taking the biggest advantage of the World Trade Organisation's basic telecomms agreement that took effect in January 1998. Under the WTO framework, Global One has obtained licences in previously monopoly-dominated markets such as Brazil and Israel, with more to come. It has also been buying exclusive rights to portions of overseas cable capacity.

"Previously almost all of our capacity was leased," Rick Williams, Global One's senior vice president for operations, told Network World. "By 2000 or 2001, almost all will be owned by us."

An even bigger job has been putting together switching networks to make a seamless offering globally; this is being done in the face of accusations from older international carriers that have alliances that are really international band-aids. Global One officials now admit that for the first two years of its existence, starting in January 1996, the company was little more than a hodgepodge of 11 different X.25, frame relay and circuit-switched networks cobbled together from the owners and any other capacity it could lease.

Only toward the end of 1997 did Global One finally award a contract to Nortel Networks to place its Passport ATM switches uniformly around the globe. This contract was partly in tandem with a 1997 domestic Sprint migration to Nortel from its older Alcatel switches. The multiservice Nortel switches provide frame relay and voice service as well as native ATM. Global One says its frame relay business grew 52 per cent in 1998.

The global Nortel network now encompasses 170 nodes in 91 cities in 38 countries. By year-end those numbers should total 240 nodes in 110 cities in 48 countries. Global One admits it sells less native IP service than frame relay and ATM. But it promises a new service later in the year - to be called Global IP Plus - that will offer yet-to-be-defined quality of service metrics on a Cisco-based network internally rolling out under the name "AllianceNet".

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More about Alcatel-LucentDeutsche TelekomFrance TelecomGlobal OneNATONBCNortel NetworksService MetricsSprintTandemWorld Trade OrganisationWTO

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