'New' MCI plans European product push

The disgraced telco formerly known as WorldCom is looking to wipe off the mud of its $11bn (£7bn) accounting fraud with several new product launches in Europe, under its new 'old' MCI brand.

MCI now needs approval to proceed through 'fast-track' Chapter 11 reorganisation in the US, which will see it shake off at least $36bn of debt.

Previously called MCI WorldCom, the company dropped the MCI tag in late 2000, around the time of the proposed merger with Sprint, which would have added to the 70 telcos that rapidly built up WorldCom.

The firm's restructured European operations are already doing well following consolidation that began in 2000. The 24-month integration plan resulted in the merger of 36 companies and saw headcount reduced from 12,500 to 6,500.

Sue Davidson, vice president EMEA retail sales at MCI, told vnunet.com that the company would be cash positive in Europe this year. She described a 21 per cent increase in revenue last year as "a stunning performance given we had a bankruptcy and a fraud".

New sales in the first quarter of 2003 were up 34 per cent over the last three months of 2002. "We lost very few customers. They did slow down plans for new purchases, but they are now placing orders," Davidson added.

MCI now plans to reap the benefits of its $38bn infrastructure investment to tap into future growth in network traffic generated by outsourcing and utility computing.

The firm also recently launched a new voice conferencing product and will introduce an internet conferencing product in Europe in the next few months. Its voice over IP product, Advantage, is due to ship in the UK early next year following autumn trials.

But although new chief executive Michael Capellas has vowed that MCI will not start life by re-igniting the price war fought by WorldCom, not everybody is convinced.

"It would be a case of a leopard changing its spots," said Alban Thurston, analyst at Ovum. "IP-based infrastructure just adds to their cost advantage; you can expect them to be aggressive."

Asked whether the firm's name was still mud with some, whatever the brand, Davidson responded: "I understand their concerns from the past, but we have a new board, a new chief executive and an entirely different future."

Davidson added that all staff would go through an ethical training programme. "The new MCI is the start of a really ethical company," she said.