Speech Summaries

Brian Brewer Senior Vice President and Chief Marketing Officer WorldCom Group

Migration And Displacement Of Private Networks

Brian Brewer, SVP and Chief Marketing Officer, WorldCom Group, spoke on displacement of enterprise services.

Historically, it was feared that frame relay services would displace higher revenue private line services. Today, the industry is concerned about displacement of frame relay and ATM service to newer IP services.

In 2002, for the first time, frame relay, ATM, and Internet access expenditures will exceed private line expenditures. This shows that advanced access services are displacing private lines. Going forward, there is no question that VPNs over IP will rule the day and drive displacement from frame relay and ATM services.

WorldCom sees itself as offering the connectivity to the enterprise and providing the services necessary to enable the VPNs and security services that enterprises demand. Also look for displacement and disruption coming from enterprises moving toward circuit-switched network services.

Questions And Answers

Q: What is the breakdown of your customer base?
A: We see a migration of our customers to building their own networks. They are not outsourcing. We have also seen in a number of industries, especially in an economic decline, some companies that realize that networking is not their core business and so they come to us or EDS, IBM etc. We also have an advanced set of clients that put together dark fiber and light international networks, using a great deal of help from us, as well as doing it themselves. These tend to be financial firms.

Q: Is the future of your company's revenue going to be primarily based on IP?
A: I think it is. Look at what price competition did in the long-distance business. These folks shocked the system. It is no longer about moving data from New York to Los Angeles. It is about how do you get services into the hands of the user, whether they are at home, at a corporate office in Manhattan, or at a branch office overseas. We, as carriers, ought to play in the environment to provide connectivity and information to the end user. We will use any technological means necessary to do this, whether it is fiber to a large office, DSL to the home, or VSAT to a remote location. We must make it easy for enterprises to make their applications easy to use.