Killian: Verizon-MCI merger is meeting goals

2006 'a very good year', according to Verizon Business President

Verizon Business, an operating unit formed after Verizon Communications acquired MCI, marked its one-year anniversary on Jan.6. The U.S.-based operation expects total revenue to exceed US$20 billion for 2006, leading Verizon Business President John Killian to call it "a very good first year." In a recent interview with Computerworld, Killian talked about the past year, the competition and the future of his business unit.

How has the integration of MCI and the former Verizon Enterprise Solutions Group gone?

We've just finished our first year in business and feel we had a very good first year. Integration has gone extremely well. One goal we had a year ago was to hit the enterprise market globally very quickly, achieving the switch to the Verizon Business brand. That has gone quite well. We're outperforming and gaining share on the other business carriers.

What are your hiring plans for 2007?

Our workforce will probably stay fairly constant with where it is right now. In the first year, we brought the workforce down 10 percent, so it's more than 34,000 now. We'll be adding skill sets around the areas of professional services, IT and managed services, so you'll see a change in the mix of the workforce.

How does Verizon differentiate itself in the worldwide market?

We've very well positioned with the best global network. We have 7,000 of our 34,000 workers overseas, which gives us unsurpassed capabilities. Major financial companies and manufacturers are looking for providers who offer service all over the globe. The former MCI retained a lot of share during the time they were potentially going bankrupt, and that's a real testament to the kinds of skill sets that were brought in. I think we've built on those. Also, we were a first mover to IP. Businesses are moving more and more to Internet Protocol for their networking and for VOIP, so that product set stands us out.

What's your reaction to the AT&T and BellSouth merger, especially the well-publicized concessions AT&T made to get FCC approval?

Candidly, we at Verizon Business don't pay a lot of attention to it. Those conditions are AT&T conditions and not ours, so there's nothing constraining us at all. If anything, it might create some opportunity for us as far as speed in the marketplace, because we're not going through another integration, while they are.

Do you see a price war or something else brewing because of mergers and increased competition from foreign carriers?

If anything, there's more logic put back in the industry with mergers. There used be a whole host of people going after the business, and it's a smaller group now.

What do your big business customers say is their top concern?

Top of mind with all of them is reliability, making sure that the network works. Second, we hear a lot about the need for help [running] the day-to-day network, both voice and data. They want it to be up, they want it available, they want it modern. We're managing the voice and data networks for about 3,500 companies. That's growth of more than 20 percent per year, which is nice growth.

Where does Verizon Business need to improve?

There's a couple of areas. One is continued new product development, particularly around IP and managed services and IT services. Second is that we need to get more efficient. While we're well ahead of our targets, there's still a lot of opportunity to be more efficient. We are investing significant money in new systems. The former MCI had three or four operational support systems, the brains that allowed the business to operate. They never integrated the UUnet, the MCI and the WorldCom systems. We have a program called Single Stack to bring that down to one operational support system.

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