WorldCom Inc. is offering a new program to sell converged voice and data service to businesses, the company announced Wednesday. The new program, called WorldCom Connection, will consolidate local, long distance and data traffic on WorldCom's global IP (Internet Protocol) network.
The new program replaces an earlier voice-over-IP (VoIP) program called IP Communications that WorldCom launched in 2001, and is designed to appeal to a wider range of businesses, according to Barry Zitt, senior director of product marketing at WorldCom.
"The best way to describe WorldCom Connection is that it's a hosted IP communications portfolio. The call control signaling equipment and overall intelligence of the system reside on our network versus having that equipment installed at the customer site," Zitt said.
The new program will offer companies simplified network management and billing, in addition to standard features such as call forwarding and call screening, he said. The company is also promoting the security features of the program such as firewalls enabled with SIP (Session Initiation Protocol) and network address translation (NAT) that protect IP-based voice traffic as it travels in to and out of a company network, according to the statement.
Companies that sign on for the new service may continue to use analog phones, as well as digital private branch exchange (PBX) equipment, or can migrate to a pure IP network that uses SIP, according to the WorldCom statement.
WorldCom provides analog phone users with an analog-to-digital converter produced by Mediatrix Telecom Inc. Companies using PBX equipment would need to add a gateway to their network that would direct calls forwarded from the PBX to phones connected to the office LAN, according to Zitt.
For companies that are willing to make the transition to pure-IP telephony, WorldCom supports desktop IP phones produced by Cisco Systems Inc. and PingTel Corp. It will soon announce support for a third IP phone vendor, Zitt said.
The announcement, which coincided with this week's Voice on the Net Conference in Atlanta, is the latest in a string of announcements from Telecommunications companies and VoIP vendors regarding new products and services.
Verizon Communications Inc. announced in September a new VoIP service called IPT Watch, which allows customers to determine how much of their IP voice service Verizon can manage -- from hardware to more comprehensive quality of service agreements.
On Monday, Sprint Communications Company LP announced new VoIP capabilities for its Coral Communication System. The new program will give companies the ability to link multiple PBX systems over managed IP networks, Sprint said.
For financially troubled WorldCom, which filed for Chapter 11 bankruptcy protection in July, the new program is seen as a step on the road back to solvency, Zitt said.
"What we're doing, by continuing to invest in services like (WorldCom) Connection, is to show our customers that we have complete confidence that (WorldCom) will emerge from bankruptcy. We're not investing as much in new products as we were two years ago, but Connection is one area that we view as a long-term growth area for (WorldCom) and the whole company is behind it. "Those who follow the telecommunications industry also see reason to be optimistic about the new program, but say the latest announcement will do little to thin the clouds hanging over WorldCom.
"It seems like WorldCom is a tale of two companies," said Jeff Kagan, an independent telecommunications industry analyst.
"On the one hand, there's the WorldCom that we see in the headlines every day -- the struggling WorldCom. On the other hand, there's the WorldCom that continues to roll out new services and be very successful at it."
Kagan points to WorldCom's "Neighborhood" program, which offers bundled local and long distance service to home users for a flat monthly rate as an example. In September, WorldCom announced that it had signed up over 1 million customers since launching the program in April -- a result ahead of expectations.
"WorldCom is hoping that (the WorldCom Connection) announcement will do for their business market what Neighborhoods is doing for their consumer markets," Kagan said.
Among WorldCom's biggest advantages in delivering combined voice and data services, says Kagan, is its worldwide data network, including the UUnet Internet backbone provider in North America and international data networks around the world. That enables WorldCom to deliver uniform services to companies with geographically dispersed offices, says Kagan. In contrast, many of WorldCom's largest competitors -- the baby Bells -- can only offer regional services.
Still, WorldCom must win over customers who are wary of its precarious financial situation and spooked over events such as last week's service outage on WorldCom's UUnet Internet backbone and unsure of trusting a vital business function to relatively new technology. [See "UUnet backbone problems slow down the Net," October 4, 2002] For those customers, WorldCom is offering assurances in the form of service level agreements and customer satisfaction guarantees that would compensate customers for downtime and other service interruptions.
Zitt sees a bright future for WorldCom in the VoIP area.
"Despite the economic malaise, we see a lot of interest in this technology. It's no longer a question of 'if' but of 'when' customers will invest (in VoIP). We're seeing positive signals that we're going to see a gradual migration of services over time," Zitt said.
But Kagan doubts that WorldCom's new program is a "magic bullet" that will lift it out of bankruptcy. At most, Kagan says, the program will help the struggling company hang on to valuable customers and, as with its Neighborhood program, generate some desperately needed good news.
"WorldCom has taken a hit. They need to shake off the old baggage, draw a line in the sand, and separate their financial issues from their marketplace issues," Kagan said. "The financial issues will have to work themselves out in the next year or two. In the meantime, WorldCom has a challenge on the marketing side, which is to hang on to customers and grow their business."