Global One CEO Expands on Future

LONDON (07/06/2000) - According to Daniel Caclin, Global One Communications Inc.'s revenue problems and contentious past are pure history. Caclin was appointed chief executive officer (CEO) of the global telecommunications operator when France Télécom SA assumed full control in January, and the outlook -- which includes media reports that the company is looking into a possible initial public offering (IPO) -- looks considerably brighter, the French-born mountain climber insists.

When France Télécom acquired the outstanding shares in Global One from Sprint Corp. and Deutsche Telekom AG -- its two former partners in the joint venture -- for $3.88 billion plus $464 million of assumed debt, the company gained a global network with ATM (Asynchronous Transfer Mode) and Frame Relay nodes in 44 countries, and IP (Internet Protocol) nodes in 40, serving some 30,000 business customers. [See "UPDATE: France Télécom Details International Plans," Jan. 27.]Caclin and company have embarked on a press tour to tout the company's plans to break even by 2002, expand its network reach globally, and offer its international corporation client base new Internet business applications and hosting services, including video streaming of the Tour de France bicycle race this month.

Global One's fifth CEO sat down with IDG News Service for a one-to-one interview in London on Wednesday.

IDGNS: How did the failure of Sprint's planned merger with WorldCom Inc. affect Global One?

Caclin: As was part of the decision of Sprint (to sell its Global One shares to France Télécom), we have existing customer contracts for the next year and a half. (Editor's Note: Sprint and Deutsche Telekom agreed to continue to support Global One's customers in their own territories until January 2002.) Other than that, Sprint has not come to us to talk.

As a matter of fact, the merger could be honored and it doesn't mean anything from a Global One point of view. Will Sprint want to use us longer than expected? That I do not know. But I will go on with my own sales force in the U.S. and would not ever go back to the Sprint U.S. exclusivity.

Besides, as far as I know, they have still to announce officially that the merger will not happen. But Sprint has never asked to talk to us.

IDGNS: Would Global One and France Télécom be interested in acquiring Sprint?

Caclin: I am in charge of corporate customers for Global One global hosting and network. I do not direct such strategy and policy decisions for France Télécom.

IDGNS: Is Global One interested in buying Equant Network Services Inc. in order to expand U.S. services?

Caclin: I personally choose not to comment on that.

IDGNS: Can you confirm that Global One has had discussions with Equant as has been reported?

Caclin: I choose not to comment on that for I would not want to give any misleading information.

IDGNS: Has Global One filled the hole in its U.S. and German coverage left by the departure of Sprint and Deutsche Telekom?

Caclin: Yes, we are doing so. We have put in place a dedicated sales force in Germany. We plan new sales offices in Dusseldorf, Munich, Hamburg and Stuttgart in 2000, and Berlin and Nuremburg in 2001. Our carrier business will offer voice and voice over data services, as well as establishing nodes in six major business centers.

As for the U.S., we have a partnership with Intermedia Communications Inc. that we announced last month [See "Global One, Intermedia Team for U.S. Service," June 16]. It is a way for us to get better access costs for customers. And we are rolling out our own networks in the U.S. Our agreement with Intermedia is a nonexclusive agreement, and it will help us connect the customers to the nodes.

IDGNS: The emerging standard seems to be Multi-Protocol Label Switching (MPLS).

AT&T Corp. and WorldCom are using it in their domestic U.S. networks for hybrid IP/ATM networks, and Equant and Infonet Services Corp. are beginning to build it out as well. Is Global One working on building that standard into your networks?

Caclin: We are more than interested in MPLS, especially for our IP VPN (virtual private network). In fact, we already have MPLS in Spain. It's a matter of days before it is ready, if it is not already done.

IDGNS: Upon fully acquiring Global One in January, Michel Bon (chairman and chief executive officer of France Télécom) said that none of Global One's existing 3,800 employees would be laid off. Has that promise been kept?

Caclin: Yes, it has. We are such a growing business that we did not need to. We did decide to close the Brussels headquarters. Most of those people have been relocated to other countries.

IDGNS: Who do you consider to be your biggest competitors? For example, how stiff is the competition from Cable & Wireless PLC (C&W) as it continues building its international IP network? (Editor's Note: In November of last year, C&W announced it had begun building a $3.5 billion international IP network that would have 84 international nodes by 2001. The first phase was completed in May. [See "C&W Completes First Phase of Global IP Network," May 10.])Caclin: It (the C&W network) shouldn't be so difficult for France Télécom's position. We are in a simple market because there are only six other players -- C&W, AT&T, WorldCom, Sprint, Infonet and Equant -- and we know all of them very well.

IDGNS: How does Global One stand out from that pack?

Caclin: We think we are especially good on three separate parts. One: as a pure integrated provider.

Two: as a very complete global hosting provider. We will have eight new global hosting centers completed by the first quarter 2001 in Sidney, London, Tokyo, Hong Kong, two in France and two in the U.S. And there will be expansion during 2001-2002 to 13 additional centers across Europe, Latin America and in Asia-Pacific. We plan the expansion of existing facilities at 100 plus POPs (points of presence) to provide local host and applications solutions. In all, the initial phase of capital investment is about $100 million.

And also three: We are a very powerful provider on the product management side.

Global One has more than 200 people working full-time on product management worldwide. And that is not working on sales. I don't think that, there, most of our competitors are so strong.

IDGNS: Is Global One moving towards becoming an ASP (application service provider)?

Caclin: We see ourselves as an applications enabler for our customers. We're working on standardizing solutions, and our main focus is end-to-end service.

We are a hosting company, and launched on July 5, our Global Hosting to serve e-business all over the world. Security is a very important part of it, as is Internet, extranet and Web hosting.

We see such a growing demand from customers for such services. It is 20 to 25 percent growth for us in revenue every year. We have a deep understanding of very large contracts and have the ability to mange such large products.

IDGNS: What is Global One's relationship with other large divisions within France Télécom, such as U.K. mobile phone operator Orange PLC?

Caclin: Orange is a very important company which is new in the France Télécom family [See "France Télécom, Orange Detail US$40B Merger," May 30]. We are very much interested in working with Orange to provide mobile services for corporate customers.

We already integrate wireless access -- GPRS (the high-speed network technology, General Packet Radio Services) in our solutions and UMTS (universal mobile telecommunications service) later on.

Global One, in Reston, Virginia, can be reached at +1+703-689-6010 or http://www.globalone.net/. France Télécom, in Paris, can be reached at +33-14-444-2222 or at http://www.francetelecom.com/. Equant Network Services -- a division of Netherlands-based Equant NV -- is headquartered in Atlanta and can be contacted at +1-770-612-4700 or at http://www.equant.com/.

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