WorldCom committed to global VPN service

The international subsidiary of WorldCom Inc. is telling multinational customers that it has money and will spend it on providing global VPN (virtual private network) services, despite the growing financial woes of the U.S. parent company.

"Last week we received a financial commitment from our creditors to move forward in Europe," said Håkan Redtzer director of VPN product marketing at London-based WorldCom International, Tuesday on the sidelines of The Burton Group Corp.'s Catalyst conference in Munich. "We have every intention to remain global; otherwise, we can change our name."

WorldCom, believed to be the world's largest IP (Internet Protocol) service provider, is also one of the world's largest VPN service providers. And Europe, with over 150,000 customers generating US$2.5 billion in annual sales, remains a growth market, particularly for data services, Redtzer said.

Shortly after the European restructuring announcement last week, WorldCom International executives met with members of the EVUA (European VPN Users Association) to discuss their growing concerns about the financial integrity of the Clinton, Mississippi, telecommunications company, according to Redtzer, who fielded questions from customers at the meeting.

"Many EVUA members, who are either U.S.-based or have extensive operations there, are understandably concerned about the status of the company," he said. "As a result, every single member is looking at a contingency plan, something many didn't think was necessary in the past. After all, who would have thought, even a year ago, that WorldCom would ever file for bankruptcy protection? We have to live with this reality."

Despite the problems in the U.S., WorldCom is successfully expanding its VPN business in Europe. "Demand for IP-based VPN service continues to grow as customers seek flexible, easy to manage ways to connect their remote workers, customers, suppliers and partners," Redtzer said. "Our new strategy is to continue focusing on growth services, like VPNs, and to exit or reduce our presence in other markets, such as mobile and hosting."

According to Redtzer, the new emphasis at WorldCom is to move away from customer growth to cashflow. "Consequently, we are not looking as aggressively as in the past to deploy new VPN services and technologies and will focus instead on ensuring service to existing customers," he said.

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