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Verizon to Operate Global Network
February 7, 2001 -- In an initiative designed to expand Verizon Communications'
presence in the large business market, the company today announced plans to
assemble and operate a global telecommunications network that will link the
United States with major cities in Europe, Asia and Latin America.
Verizon will acquire fiber-optic cable, switching and transmission
equipment and related network management software to deploy the high-speed,
broadband network, which will carry data, Internet and voice traffic. The
first phase -- which will link New York to London, Paris, Amsterdam,
Brussels, Frankfurt and Milan -- is scheduled to begin operating by the
second quarter of this year. Links between New York and Toronto and
between Hawaii, Hong Kong, Tokyo and Sydney are already operating and will
be part of the new network.
"This is a logical next step for Verizon because it will help unlock the
full value of our network and our core business," said Eduardo R. Menasce,
president of Verizon's Enterprise Solutions Group, which manages the
design, operation and maintenance of networks for large business customers.
"We believe that our global network perfectly positions Verizon to become
a leading presence in the large business market, which is the
fastest-growing segment in the U.S. telecommunications industry and
generates $140 billion a year in revenues."
Verizon will make a significant capital investment to complete the first
phase of the network. This investment is already incorporated in Verizon's
capital budget and in the financial guidance for 2001 and 2002 that the
company issued last year and reaffirmed today. The company also expects to
save at least $300 million in transport costs over five years because it
will be significantly less expensive to route international calls over
Verizon's global network rather than to continue to pay other carriers to
transport the calls.
Over the next two years, the network will be expanded and provide direct
links to other leading commercial and financial centers including Geneva,
Zurich, Madrid, Singapore, Buenos Aires, Caracas and Mexico City.
In addition to serving the large business market, other major benefits of
the network include:
"As a result, we will be able to offer a facilities-based network that
connects commercial centers around the globe and that provides an array of
voice, data and Internet services to large business, wholesale and
residential customers. Our prices will be competitive and our service will
be outstanding," Bartlett said.
Key elements of the network will be provided by two companies with which
Verizon has close alliances and in which it has ownership stakes -- FLAG
Telecom and Metromedia Fiber Network, Inc. (MFN).
FLAG Telecom is a leading independent network services provider and
carriers' carrier. It owns and operates a high-capacity, undersea cable
system that links Europe, the Middle East and Asia. The company is
completing work on a trans-Atlantic cable between New York, London and
Paris that is scheduled to begin operating next month. FLAG is also
developing FLAG North Asian Loop, which will connect major cities
throughout the Asian region, and is developing a trans-Pacific cable.
MFN owns fiber-optic infrastructures within key metropolitan areas in the
United States and internationally that can transmit the latest data, video,
Internet and multimedia applications. MFN has deployed more than 1.2
million fiber miles and plans to increase the total to 3.6 million miles
worldwide by 2004.
GSI plans to operate gateway switches in New York, Los Angeles, Honolulu
and London to aggregate data and voice traffic and route it over the new
network. A European network operations center will be constructed in a
suburb of London.
GSI will assemble additional portions of the new network through a variety
of methods, including forming partnerships with other companies and leasing
capacity on the networks of other carriers.
Initially, Verizon's Enterprise Solutions Group will market the global
network to large business customers in New York -- where the company
received regulatory approval in December 1999 to offer long-distance
service -- as well as to business customers in states outside the former
Bell Atlantic footprint that were served by GTE prior to the companies'
merger forming Verizon.
Verizon will extend its customer base for the new network to the New
England and mid-Atlantic states once Verizon receives regulatory approval
to offer long-distance service in each of those states. The company has
filed for approval in Massachusetts and also plans to seek approval this
year for Connecticut, New Jersey, Pennsylvania and Rhode Island.
Once the approvals are obtained, the new network will take full advantage
of the fact that 40 percent of all international long-distance traffic in
the United States originates in Verizon's service territory. In addition,
more than 30 percent of the headquarters of the worldwide Fortune 500
companies are located in this territory.
Verizon also has negotiated an exchange agreement with its Canadian
affiliate TELUS, one of Canada's leading telecommunications companies, that
provides for utilization by TELUS of the new network.
Bartlett said Verizon, which has operations in 19 countries around the
globe, is currently negotiating similar agreements with other affiliates.
"The new network is also a key element of Verizon's strategy to become a
major force in the global marketplace over the next several years by
continuing to gain scale in our network businesses, solidifying our
position in our home markets and building on the skills and capabilities of
our affiliates and partners," Bartlett said. "The end result of this
disciplined approach to international expansion will be a globalization of
our business.
"Verizon has all of the ingredients needed to make this new network a
success. We have a critical mass of minutes of use generated by our
domestic business and consumer operations and by our affiliates. We will
offer an array of advanced products and services. And we believe that our
new network will have one of the lowest cost structures in the
international telecommunications industry, which will enable us to compete
favorably with other global carriers."
Additional information about Verizon's global network -- including a map
and fact sheets -- is available at
http://newscenter.verizon.com/kit/global/.
Writers Wanted
Would you like a little publicity? Why not submit an article for me to put here. Articles must be about something in the Burlington Vermont area (including as far out as Essex, Williston, and Shelburne. Please submit articles to
editor@burlingtonwebmagazine.com There is no financial compensation for articles, but I am willing to advertise your business, books, services, etc.
By Steve Marcus
"We will manage and operate our global network by owning the switches and
controlling our own transmission facilities, rather than just re-selling
capacity and services on another carrier's network," said Thomas A.
Bartlett, president of Global Solutions Inc. (GSI), a new Verizon business
unit that is responsible for assembling and managing the global network.
"And we will support our network with outstanding customer care, including
Web-based services such as provisioning and billing.
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