Posted: 05/1999
Global Crossing Comes Ashore, Snatches Frontier in
Integrated Services Play
By Ken Branson
Most telecommunications companies start out on dry land. Eventually, they get to the water's edge and have to get across the pond somehow. As often as not, they buy capacity on a transoceanic cable owned and operated by Global Crossing Ltd., Hamilton, Bermuda.
Global Crossing has turned this evolution on its head. The company started out four years ago in the vast deep and has only recently crawled up on the beach. Its strategy: Lay the cables in the water first, then sell capacity strictly wholesale. Eventually, Global Crossing intends to build a 35,000-mile fiber optic network linking the Americas, Asia and Europe. Oh, yes ... and Bermuda.
In March, Global Crossing came up on the beach, slithered up South Clinton Avenue in Rochester, N.Y., and seized Frontier Corp. by its pincers in a deal worth $11.2 billion. If the merger goes through, the combined companies, which will use the Global Crossing moniker, will have gained a dry-land fiber optic pipe, an Internet service provider (ISP) that hosts some of the premiere sites on the World Wide Web, a North American competitive local exchange carrier (CLEC) and rural incumbent LEC (ILEC) operations in 13 states.
That Global Crossing has made such an acquisition is no surprise to analysts and competitors. "Basically, what they've done has reaffirmed what we've always known," says Glenn Davidson, vice president of corporate communications and external affairs at Viatel Inc., New York, which is building a Pan-European fiber optic network and leases capacity on Global Crossing's AC-1 trans-Atlantic cable. "That is, the real business is in being an integrated service provider, and not just a carrier's carrier. That's where the revenue is."
"When Bob Annunziata arrived, it clearly signaled that Global Crossing had pretty broad ambitions and intended to be more than just a bandwidth purveyor," says Mike Smith, managing director of Stratecast Partners, Mountain View, Calif.
Robert Annunziata, former CEO of Teleport Communications Group Inc., Staten Island, N.Y., and former head of the business services unit of AT&T Corp., joined Global Crossing in January. Some analysts believe the decision to turn Global Crossing into a service provider was made by Global Crossing's board and management long before he arrived.
Whenever the decision was made to be more than just a pipe, the hard part may lie ahead for Global Crossing. Frontier, while of modest size when compared to its rivals in any one line of business, is a lot to swallow.
Frontier, for a century as plain a plain old telephone company as it could be, has been on a buying and restructuring binge in the last two years under the leadership of its CEO, Joseph Clayton.
Clayton has shaken up the top management, spurred the company into CLEC competition, acquired Global Center Inc. to give Frontier an Internet presence and focused the company's target for all its lines of business: business customers who spend between $5,000 and $100,000 (revised upward from $50,000 in the last six months) a month on communications.
Under Clayton, Frontier has moved aggressively to put as much of its customer interface as possible on the web, and given its customers considerable control over ordering and provisioning through its uCommand online account management software. Frontier employs under Clayton more than 8,000 people, who have managed to integrate most of what they know how to do best across all of their lines of business. In 1998, Frontier Corp. made $2.6 billion in revenues, an increase of 9 percent over 1997. Frontier's stock was trading at about $52 per share in the weeks after the merger announcement, up from $34 at the end of 1998.
While analysts are optimistic about the ability of Global Crossing's management team to integrate Frontier into its operations, they expect some bumps in the road. Stratecast's Smith sees a number of large decisions looming.
"Just for starters, what does Global Crossing want to do with Frontier's ILEC business?" Smith asks. "And how about [its] traditional long distance business, particularly residential customers? Is that a business they really want to maintain? Does Frontier have the salespeople to sell Internet and data services, or will Global Crossing have to augment that sales force? Then there is the question of OSSs (operations support systems). One of the reasons Global Crossing wanted to acquire Frontier was for their OSSs. But are those OSSs really capable of supporting next-generation data and Internet services?"
The answers to these questions aren't here yet, but there are very broad hints at answers in Frontier's history, if not in Global Crossing's. Clayton is the key to those hints, which he has dropped liberally over the past several months.
First, while Annunziata denies point-blank that Global Crossing intends to get rid of the ILECs, it's good to remember the consumer business never has been Clayton's favorite. "High cost, bad debt, lots of churn," is the way Clayton described the consumer business to PHONE+ late last year. The ILEC properties long have presented Clayton with a dilemma. On the one hand, he always has made it clear that he wanted to separate Frontier's telephonic past from its integrated future--"to be more like Sunnyvale [Calif.] (Global Center's headquarters city) and less like Rochester." Asked recently whether he might consider spinning off the ILECs, he replied, "It's a distinct possibility." But the ILECs provide Frontier with steady revenue--about $700 million per year, Clayton says--and also with a pool of local telecommunications expertise.
As for the OSSs, Clayton thinks Frontier is almost there, after a long struggle. The billing systems, numbering six when Clayton arrived in 1997, are nearly down to one. "We're gonna force-feed this thing," he says. "We're gonna push this bowling ball through that garden hose."
However, given that Frontier and Global Crossing have completely different businesses, there are observers who believe integration may not be that difficult.
"If you look at Global Crossing, it's just a big pipe," says John S. Baring, managing director and co-head of the communications and media investment banking group at PricewaterhouseCoopers LLC, New York. "Maybe what's happened here is that Frontier has just bought itself an international pipe."
Analysts believe Frontier won't be the last acquisition Global Crossing makes in the United States. If Global Crossing wants more capacity on dry land in North America, there are interexchange carriers (IXCs) such as IXC Communications Inc., Austin, Texas, that might be available. IXC issued a formal statement after Global Crossing's announcement saying its management thought its stock was undervalued and would consider various ways to raise it, including "sales, swaps of fiber, joint ventures and the combination of the company with another company."
Star Forms Retail Subsidiary
By Khali Henderson
Separating its wholesale and retail operations in the United States, STAR Telecommunications Inc., Santa Barbara, Calif., announced the launch of ALLSTAR Telecom, a subsidiary offering local, long distance, toll-free and calling card services to multinational corporations. The parent company will offer only wholesale global telecommunications services.
STAR's overseas operations will continue to offer both wholesale and retail services.
"We have been building the pieces for some time and are now becoming an active player in the commercial long distance business," says Ken Hilden, chief operating officer of the new division. Hilden also will retain responsibilities with STAR as its senior vice president of client services.
ALLSTAR combines STAR's organic business-to-business group as well as its acquisition of United Digital Network, which began in November 1997 and closed March 25, says Ben Helvey, STAR's director of investor relations.
STAR also acquired two other retail telecommunications companies, including PT-1 Communications Inc., which was finalized Feb. 4, and L.D. Services Inc., which marked the company's entrance into the retail telecom business in September 1997. Neither company will be folded into the ALLSTAR subsidiary, Helvey says. L.D. Services, now called CEO Telecom, offers residential long distance services to ethnic communities, and PT-1 offers residential prepaid calling cards.
ALLSTAR has a sales force of 105 account executives as well as offices in Atlanta; Dallas; Flushing, N.Y.; Fort Lauderdale, Fla.; Houston; Los Angeles; Miami; New York; Phoenix; Seattle; Washington; and Woodbridge, N.J.
Delta Three Launches Web-based Agent Program
New York-based Delta Three Inc., a wholly owned subsidiary of Hamilton, Bermuda-based RSL Communications Ltd., introduced in March a real-time automated web-based program for agents selling its personal computer (PC)-to-phone and phone-to-phone Internet protocol (IP) telephony services.
"No other affiliate program offers real-time commission reports and click-through tracking. We took a simple web concept, proven through our Online Interactive Center, and used it to create the industry's first real-time, web-based agent reporting system," says CEO Elie Wurtman.
Delta Three's Online Interactive Center allows the company's retail customers to access their own account information via the web. This technology has been extended to agents, enabling them to download prepared web advertisements, choose pricing plans, track results and monitor commissions.
Agents can sign up at http://agent.deltathree.com. Once on board, each agent is issued a unique tracking code, which makes it possible to check commissions and click through rates online at the Agent Interactive Center, www.deltathree.com/agentic/
"[Delta Three's] new agent interactive center consolidates all of the information that an affiliate needs--sales and commission data, click-through data, artwork, special promotions and more--in a single, easy-to-use, web-based system," says David Krupinsky, editor of the Hello Direct Information Network, San Jose, Calif., one of Delta Three's top agents.
Shasta, Lucent, Ascend, Telia Finland Propose IP VPN
Framework
By Peter Lambert
Seeking to standardize the mechanisms service providers use to deliver "network-based" virtual private networks (VPNs), four equipment vendors proposed to the Internet Engineering Task Force (IETF) a framework for Internet protocol (IP)-based VPNs.
Sunnyvale, Calif.-based Shasta Networks Inc. and co-authors Ascend Communications Inc., Alameda, Calif.; Lucent Technologies Inc., Murray Hill, N.J.; and Telia Finland Oy, Vantaa, Finland, made the proposal March 15.
Michael Howard, principal analyst for Infonetics Research Inc., San Jose, Calif., suggests that the framework could help overcome the central impediment to widespread deployment of IP value-added services--"a lack of general agreement on the definition and scope of VPNs."
In contrast to provisioning VPNs via customer premises equipment (CPE) designed to encrypt traffic across private "tunnels" through the public Internet, the framework proposes that VPNs be provisioned by service providers "at the subscriber edge of new public IP data networks."
According to Shasta Networks president Anthony Alles, the framework envisions migrating VPN service-enabling technologies from customer sites into public networks. This, he says, will empower service providers to deliver all manner of "IP Centrex," or network-based IP services, including mobile-worker access to private corporate networks and private extranets among companies, partners and customers. In February, Telia Finland began trials of Shasta's service-enabling gateways and subscriber policy-management systems.
"Today, a customer buys dumb pipes or virtual circuits and creates his own firewall, quality of service (QoS) and VPN services, but this requires too much expertise for the mass market," Alles says. As broadband access technologies "bring Fortune 500 capacity to the mass market, we need to move service provisioning into the network--so there's no more buying new customer premises equipment for new capabilities--and we need to automate service provisioning for scale."
Although focused on IP traffic and applications, including voice, the framework intends to enable service providers to implement VPNs across any physical medium or cell- or frame-based switching system.
Siemens Joins the Rush to Next-Generation Networks
By Ken Branson
Following the intent, if not the method, of its major North American rivals, Siemens AG, the venerable German maker of telecom gear, has leaped into the fight for next-generation network business by creating a separate company, Unisphere Solutions Inc., Burlington, Mass.
Siemens will acquire Argon Networks Inc., Littleton, Mass., and Castle Networks, Inc., Westford, Mass. In addition, Siemens announced it had taken an equity stake in Accelerated Networks Inc., Moorpark, Calif.
Competitor Lucent Technologies Inc., Murray Hill, N.J., recently bought Ascend Communications Inc., San Jose, Calif., and Nortel Networks, Richardson, Texas, recently bought Bay Networks Inc., Cambridge, Mass. But Siemens has snapped up two startup networking companies--neither of the products of which have seen the bright side of beta--and sunk an equity investment into a third. Siemens has combined these pieces with its own Internet groups, based in Boca Raton, Fla., to create the new entity.
"We had to do something radical," explains Anthony Maher, board member of Siemens Information and Communications Group. "We needed an independent unit in the United States, which is the crucible of change."
Company officials decline to say how much they paid for the two companies, or to disclose the terms of the deal, nor how much of a stake they will take in Accelerated.
Argon develops service-provider platforms for the core and high-speed access layers of the public network. Its product, as yet unnamed, is a combination Internet protocol (IP) router and asynchronous transfer mode (ATM) switch. Castle designs central office (CO)-based communications technologies to converge circuit-switched voice and packet-switched data networks. Accelerated Networks makes integrated broadband software.
Unisphere starts with 500 employees and is funded wholly by Siemens. The new company is part of a $1 billion Siemens effort to increase its presence in data networking. Maher says all Siemens' data and networking capabilities worldwide will be available to Unisphere.
In turn, Maher says, innovation should pour out of the new company and be applied to Siemens operations around the world. "We're not just making boxes," says Maher, whose company has long been one of the world's premier makers of telecom switches. "We're providing solutions."
The CEO of the new company is Martin C. Clague, formerly of IBM Corp., Armonk, N.Y., where he was vice president of global industries solutions sales.
Lucent Debuts First Carrier-Class Management System
By Charlotte Wolter
Lucent Technologies Inc., Murray Hill, N.J., has announced general availability of its management system for network operators, OneVision Management Systems. It also formed alliances with three software developers--Micromuse Inc., San Francisco; Concord Communications Inc., Marlborough, Mass.; and Syndesis Ltd., Richmond Hill, Ontario--to add support for multivendor networks to OneVision, as well as a wide range of network and service management features.
This is Lucent's initial network management product for carriers and large service providers. The company previously had software that managed individual net-0work elements made by Lucent, but not a complete system. OneVision includes, for the first time, support for multiple vendors and multiple protocols for asynchronous transfer mode (ATM), frame relay and Internet protocol (IP) networks.
Lucent spokesman Rich Teplinsky says one driving force for the product was customer demand for outsourcing of network management. "We met with a lot of [service provider] customers who said, 'I can't manage my network and can't manage my customers' networks any more, because there are thousands of switchers and routers.'"
He says the new product also will enhance Lucent's ability to support the equipment of its recent acquisition, Ascend Communications Inc., Alameda, Calif.
Another factor in the development of OneVision is the growth of IP networks, Teplinsky says. "IP networks, especially in terms of the RFPs (request for proposals) [we are seeing] are very complex. One might have a Cisco [Systems Inc.] (San Jose, Calif.) router next to an Ascend product. The network elements are very diverse. With Bell Atlantic [Corp.] (Philadelphia), we had to support Cisco routers, Ascend remote access devices and other kinds of switches. And with the mix of IP and the traditional voice network, the interworking and interoperability requirements are extreme."
OneVision was announced in 1998, but had been available only to the initial customer for the product, Bell Atlantic.
The new product supports both management of individual elements in the network--routers, switches and servers--but also manages the performance of services, such as e-mail and virtual private networks (VPNs), and verifies compliance with service level agreements (SLAs). It includes provisioning of network services and bandwidth, as well as fault-tolerance functions and alarms.
Payphone Lawsuits Pile Up Against Resellers
By Kim Sunderland
Additional lawsuits have been filed in federal district court in Alexandria, Va., against switch-based resellers that allegedly haven't paid required payphone usage costs. This brings to seven the number of lawsuits that have been filed against these resellers as of March 29. Three similar complaints were filed at the same court earlier in March.
Resellers named in these recent lawsuits include STAR Telecommunications Inc., Santa Barbara, Calif.; Pacific Gateway Exchange Inc., Burlingame, Calif.; Primus Telecommunications Inc., McLean, Va.; and UniDial Communications Inc., Louisville, Ky. STAR recently announced it is acquiring PT-1 Communications Inc. of Flushing, N.Y., which--along with Business Telecom Inc., Raleigh, N.C., and Paramus, N.J.-based EconoPhone Inc.--was named in the first batch of nonpayment complaints filed by the same parties. Because the companies have just received the complaints, they would not comment.
"These resellers have been given every opportunity to meet their compensation obligations under the Federal Communications Commission (FCC) regulations," says Vincent R. Sandusky, president of APCC Services Inc. of Fairfax, Va. "They have flaunted the law by ignoring the regulations as well as invoices and demand letters that have been sent to them."
APCC and Data Net Systems LLC, which jointly filed the first three lawsuits, are joined as plaintiffs in these filings by Pacific Telemanagement Services; NSC Telemanagement Corp.; and Davel Communications Corp. The companies, which are authorized compensation billing and collection agents for more than 2,000 payphone service providers (PSPs), claim they have filed these lawsuits against the resellers for their nonpayment to PSPs for the use of their payphones.
The lawsuits seek the amounts owed for "compensable calls," dating from when the FCC's regulations took effect in October 1997, as well as interest, punitive damages and attorney's fees, Sandusky says. FCC regulations require long distance carriers to track and pay per-call compensation at 28 cents per call.
In a Jan. 28 order, the FCC set that rate as what interexchange carriers (IXCs) must pay for originating dial-around and toll-free calls. The FCC, however, also reaffirmed "that payphone compensation issues are best addressed in the marketplace by negotiations between long distance companies and payphone owners."
Sandusky adds that APCC is negotiating with several other resellers in an effort to avoid further litigation. But more lawsuits can be expected against other resellers and prepaid calling card companies that don't meet their payment obligations, he says. "We are vigorously pursuing these collection actions."
CLEC Offers Agents Stock Options
By Khali Henderson
aeTec Communications Inc., a competitive local exchange carrier (CLEC) and interexchange carrier (IXC) based in Fairpoint, N.Y., unveiled late April a new equity program for agents of its local and long distance services.
Unlike equity programs that offer agents buyouts based on the size of their base and the multiple for which the carrier sells, PaeTec is issuing stock options in advance of a planned initial public offering (IPO), explains Brad Bono, Eastern region president. The company plans to issue approximately 800,000 warrants to agents before its IPO, which is set for the next 12 to 16 months. PaeTec has engaged Merrill Lynch to conduct its private placement this fall.
"It's very similar to employee stock options. Practically every employee in our company has them. Agents are of similar importance in building the company, why should they not have a piece of the business?" Bono asks.
And while other companies have been criticized for hinging equity programs on an elusive buyout, Bono says that PaeTec already has a potential suitor in STAR Telecommunications Inc., Santa Barbara, Calif. STAR owns 19 percent of PaeTec.
Stock options are granted at current stock price on the day agents achieve set performance thresholds. At $50,000 per month, agents receive 2,500 warrants; at $100,000 per month, an additional 5,000 warrants; at $250,000 per month, an additional 12,000 warrants; and at $500,000 per month, an additional 20,000 warrants.
Agents become vested over four years at 25 percent each year if they maintain the level of business at which they earned the warrants. So, for example, if an agent earned 2,500 warrants at $50,000-per-month billed revenue, they would need to maintain that revenue level.
Bono says the stock-based incentive program was inspired by the company's principals' prior experiences with IXC ACC Corp. and CLEC Teleport Communications Group, both of which relied heavily on agents for their success. PaeTec currently has 260 agents in the United States that sell its local and long distance services, he says.
IDT's Net2Phone To Be Bundled in Netscape Browser
By Ken Branson
etscape Communications Inc., Mountain View, Calif., has agreed to bundle the Internet protocol (IP) telephony software of IDT Corp., Hackensack, N.J., in the next version of its web browser. Neither company will disclose the terms of the deal.
The Net2Phone icon will appear in the "next generation" browser, according to officials from both companies. A release date for the new browser has not been announced. The Net2Phone icon also will appear on Netscape's NetCenter website, www.netcenter.com.
However, Mordy Rothberg, executive vice president of IDT's Net2Phone Inc. division, says the agreement is exclusive on Netscape's side, and that Net2Phone's IP telephony icon will be the only such icon appearing on the Netscape browser for the agreement's two-year duration of the contract. Net2Phone, however, remains free to conclude similar deals with other portals, Rothberg says.
Net2Phone's icon appears on other web portals, but this deal is different, Rothberg says, because it bundles Net2Phone's software in the browser itself. In the other portals, a user must download the software before being able to make a call.
For Netscape, the agreement with IDT signals another step in fulfilling its strategy of becoming a means of communicating through the World Wide Web, not just navigating around it. "We want to be the leading provider of communications on the web," says Tom Tsao, group program manager for Netscape Contact, Netscape's suite of communications services. "That's why we changed the name of the browser from Netscape Navigator to Netscape Communicator."
Williams Offers Ramp-Up Pricing for ATM
By Khali Henderson
Institutionalizing an ad-hoc carrier's carrier practice, Tulsa, Okla.-based Williams Communications announced the availability of a new pricing option for asynchronous transfer mode (ATM) service that will allow its wholesale customers the ability to economically ramp up to increased capacity.
Called the Williams Flex-UNI, the service enables wholesale customers to purchase an OC-3 or OC-12 port at a reduced rate and provision permanent virtual circuits (PVCs) in smaller bandwidth increments. Flex-UNI, available to customers under a 12-month contract, offers savings up to 37 percent on port costs; bandwidth pricing remains the same.
The service is targeted at Internet service providers (ISPs), competitive local exchange carriers (CLECs) and interexchange carriers (IXCs), says Williams Network's ATM Product Manager Travis Kringlen.
Kringlen says while the service was suggested to the company by a large, national ISP, it has a strong play for CLECs--which now are just beginning to offer data services--by allowing them to extend their connectivity beyond current boundaries, and for regional IXCs that want to expand their reach into off-net territories.
Previously, the smallest PVC that could be provisioned on an OC-3 port was 5 megabytes (MB) and 25MB for an OC-12 port. As a result, carriers with growing bandwidth requirements had two options. They could purchase a port sized for current capacity and upgrade it as demand increased, resulting in additional hardware costs and network downtime for installation. The other option was to purchase a port size and bandwidth in excess of their current needs.
With Flex-UNI, a wholesale customer can purchase capacity on an OC-3 port in increments of 1MB, with a minimum of 1MB and up to 19MB. Once they require 20MB, pricing reverts to Williams' standard OC-3 port rates.
Similarly, a wholesale customer can purchase capacity on an OC-12 port in increments of 5MB, with a minimum of 5MB and up to 70MB. Once they require 75MB, pricing reverts to Williams' standard OC-12 port rates.
Williams' objective, obviously, is to lock customers into a larger port than they initially need while offering them the flexibility to grow their connection rate to substantially faster speeds, says Jilani Zeribi, network services analyst, Current Analysis Inc., Sterling, Va. At the same time, he says, the advantage to the customer should not be underestimated.
"Carriers that must expand their network capacity rapidly incur tremendous costs changing their network equipment when moving from, for example, OC-3 to OC-12," Zeribi says. "Although a switch or router may support both speeds, the carrier must install a separate card [which may cost upwards of $50,000] when upgrading to a faster speed."
Sprint Reorganizes Long Distance Division; Merges Wholesale Group Into Business Unit
Sprint's Long Distance Division reorganized in mid-March by consolidating its international interests into one unit and pulling its wholesale business division under the Sprint Business banner.
As a result Paget Alves, formerly president of the Sprint Wholesale Services Group, is now president of sales and sales support for Sprint Business.
Spokesperson Deborah Mazur says the change does not reflect a de-emphasis of the company's wholesale business. In fact, she says, it will better serve the carrier's wholesale customers by giving them access to Sprint's fuller retail business product portfolio.
As part of the reorganization, Sprint has expanded its Long Distance International unit of its long distance division by consolidating international marketing, product management and network services in the unit, which already has responsibility for international alliances and carrier services. Lauren Wright, vice president and general manager of Long Distance International, will oversee the expanded unit.
Patti Manuel, president and chief operating officer of Sprint's Long Distance Division, has resigned for personal reasons and will not be replaced. Instead, the company will have two separate divisions--consumer and business--that report directly to Sprint's president and chief operating officer, Ronald T. LeMay.
Excel Agents To Sell Collect Calling Product
Multilevel marketer Excel Communications Inc., Dallas, entered the U.S. collect-calling market in March with the introduction of its 1-800-PHONE-ME product available nationwide. The service will be sold by the company's national network of independent agents, who will receive commissions on calls placed to their customers.
Agents will be supported in their sales efforts with collateral as well as a mass media--TV, radio and direct mail--advertising campaign in selected U.S. markets, which the company has chosen not to identify.
The service allows U.S. callers to connect to people anywhere in Canada, Puerto Rico, the United States and the U.S. Virgin Islands at 9 cents per minute every evening. Daytime calling rates vary by type of call.
GST Enters Joint Build with Level 3, NEXTLINK
GST Telecommunications Inc., Vancouver, Wash., has entered into a joint-build agreement with Level 3 Communications Inc., Omaha, Neb., and NEXTLINK Communications Inc., Bellevue, Wash., to participate in the construction of a San Diego metropolitan area network.
Under terms of the agreement, GST will participate in a joint build of approximately 26 route miles of a 62-mile multiple conduit system currently being deployed by Level 3 and NEXTLINK in the San Diego area.
In related news, GST also has teamed with Level 3 to joint build a long-haul network connecting San Diego to GST's West Coast fiber backbone. Upon completion, GST's West Coast network will span from San Diego to Seattle.
Hypercom Unveils High-Capacity IP Telephony Gateway
Phoenix-based Hypercom Network Systems' IP.tel CompressionPlus module more than doubles the capacity of IP.tel voice over Internet protocol (VoIP) gateways, reducing the cost per port of deploying IP telephony to as little as $330. With the new compression module, Hypercom gateways support up to 10 T1/E1 circuits per chassis, or as many as 80 per network node.
Besides the added value in terms of cost performance, the company says its new IP.tel configuration achieves the industry's smallest "footprint," so carriers can grow considerably without having to allocate more space to housing gateways.
Primus Acquires Canadian Competitor
Primus Canada, a subsidiary of Primus Telecommun-ications Group Inc., McLean, Va., a global facilities-based telecommunications company, is acquiring the Canadian long distance operations of privately owned, Toronto-based London Telecom Group Inc. The acquisition propels Primus Canada into the ranks of the top three largest long distance providers, behind AT&T Canada and Sprint Canada (Call-Net).
With the acquisition, Primus Canada has 200,000 customers. London Telecom is a pioneer in flat-rate long distance calling plans in Canada, which it has offered under the "London Telecom" and "LTN Network" brand names since 1990. London Telecom also provides per-minute long distance services to residential and small- business customers under the brand name "WinTel," as well as long distance services to corporate customers and other telecommunications companies through LTN Data Services, Inc.
PRIMUS Canada will pay C$76 million in cash in connection with purchase of both companies.
Frontier Doubles Internet Capacity
Frontier Corp., Rochester, N.Y., will double capacity for commercial Internet traffic along its national high-speed native Internet protocol (IP) backbone. The Frontier IP backbone uses the 12000 Gigabit Switch Router (GSR) from Cisco Systems Inc., San Jose, Calif., to run IP directly over the optical layer, bypassing traditional synchronous optical network (SONET) or asynchronous transfer mode (ATM) layers. This architecture gives the network enhanced capacity efficiency and a significantly lower cost of maintenance.
Frontier will have two OC-48 circuits linking Los Angeles to New York by the end of the second quarter of 1999. The company further plans to deploy OC-192, or 10 gigabits per second (gbps), coast to coast by first-quarter 2000.
Interoute To Buy Telegroup's U.S., European Assets
Beleaguered callback pioneer Telegroup Inc., Fairfield, Iowa, signed a letter of intent March 28 to sell its U.S. assets as well as shared capital of certain other non-U.S. subsidiaries to Interoute Communications Group Ltd., a London-based international telecommunications company. The sale is expected to be completed by the end of May.
Telegroup, which filed a voluntary petition Feb. 11 under Chapter 11 of the U.S. Bankruptcy Code to facilitate a financial restructuring, announced earlier this month that it would sell two of its non-U.S. subsidiaries to Melbourne, Australia-based Primus Telecommunications Pty. Ltd. for AU$6 million. On March 4, Primus bought Telegroup Network Services Pty Ltd. and Switch Telecommunications Pty Ltd. The sale of Telegroup Network Services excluded its subsidiaries Newsnet International Ltd. and Redicall Pty Ltd.
Newsnet and Redicall, as well as other Telegroup subsidiaries in Australia, Hong Kong and New Zealand, are yet to be sold, says David Walsh, president and chief operating officer for Telegroup.
Interoute, a privately owned company, will acquire all the assets of the U.S. company as well as its European subsidiaries, he says. Interoute's majority shareholder is the Sandoz Family Foundation.
Telegroup was delisted from NASDAQ on Feb. 18 and trades over the counter (OTC) under the symbol TGRPQ.
ADDS, MOVES & CHANGES
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H. Brian Thompson has been named chairman and CEO of Global TeleSystems Group Inc., McLean, Va. Thompson formerly is chairman and CEO of LCI International, which was purchased by Qwest Communications International Inc. in June 1998. At that time, Thompson became vice chairman of Qwest's board of directors until he resigned at the end of 1998. Prior to joining LCI in 1991, Thompson served for nine years as a senior member of management for MCI Communications Corp., now MCI WorldCom Inc. He also is a former chairman of the Competitive Telecommunications Association (CompTel). |
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Cleartel Communications, Wash-ington, has named Stephen R. Roberts as its president. Roberts has been with Cleartel since 1994. He joined the company as director of sales. Prior to becoming president, he served as vice president of sales and general manager. |
David Garrison, former chairman and CEO of Netcom, has taken a seat on the board of director's for GST Telecommunications Inc., Vancouver, Wash. Garrison was with Netcom until June 1998 when the company was merged with ICG Communications.
Walt Anderson has been appointed the chairman of the board of directors for US WATS Inc., Bensalem, Pa. Previously one of the company's directors, Anderson is the financial advisor for Gold & Appel Transfer S.A., a venture capital company, which owns more than 50 percent of the outstanding common shares of US WATS.
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International telecommunications carrier IDT Corp., Hackensack, N.J., has announced that Irving Goldstein, former CEO and director general of INTELSAT, Washington, and former chairman and CEO of COMSAT Corp., Bethesda, Md., will join its board of directors. |
Philip McGuire has been named director of consumer affairs for the International Telecard Association (ITA) and the International Telecard Foundation for Consumer Protection and Education, both in Washington. McGuire comes to ITA from the advertising and radio industries.
The United States Telephone Association (USTA) has tapped Dale E. Brown as its new vice president of mid-sized company affairs. Brown comes to USTA from COMSAT Corp., Bethesda, Md., where he served as director of congressional relations. In his new role, he will be the liaison between USTA and its 25 mid-sized member companies.
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IXC Communications Inc., Austin, Texas, has named Mark S. Lefebvre, a veteran of Internet pioneer Bolt Beranke and Newman (BBN), as its vice president of data services. The company also has named Jeff Brown (pictured) as vice president of product management and Christopher Rothlis as vice president of new product development. |
Erols Chairman and CEO Takes Helm at TotalTel
Spina is the former chairman and CEO of Erols Internet Inc., Springfield, Va., which was bought by RCN Corp., Princeton, N.J., in February 1998. Following the acquisition, Spina was vice chairman and president of Internet services for RCN.
"The Internet and local telephone service markets are logical extensions of TotalTel's present strength in long distance products and solid growth areas for the company. Dennis Spina has the expertise to drive this strategy," says Chairman and CEO Warren Feldman.
TotalTel is certified as a competitive local exchange carrier (CLEC) in Connecticut, Maryland, Massachusetts, New Jersey and New York. Spina says the company is negotiating interconnection agreements with Bell Atlantic Corp., Philadelphia, and with Southern New England Telecommunications Inc. (SNET), New Haven, Conn., a subsidiary of SBC Communications Corp., San Antonio. He reaffirms the company's intention to begin offering dedicated Internet access to corporate customers by June 1.
TotalTel will target business customers for its CLEC and Internet services, as it has with long distance. Spina says TotalTel will make use of its existing facilities in Miami, Newark, N.J.; and New York. The New York facility, at 40 Rector St., also will be the Internet service hub.
