RealTime IT News

Competitors Reap Jittery WorldCom Customers

Joel Sam is a happy guy.

As president of Technology Brokerage Group, his company sells bandwidth to business and residential customers, brokering deals with carriers like AT&T , Sprint , Qwest and WorldCom. It's the last company that's responsible for Sam's happiness, as nervous WorldCom customers look for other carriers to meet their bandwidth needs.

According to Sam, his Broadband.com service has seen a 20-25 percent surge in interest since the WorldCom crisis started to unfold last month, culminating in yesterday's Chapter 11 filing.

"Most are forming contingency plans for migrating their services," Sam said. "I would say the primary carriers these customers are looking at are Qwest, Sprint, and AT&T. Maybe 5 percent are actually switching at this point; most customers seem to be making contingency plans and are waiting it out a little longer to see if the service degrades further."

With WorldCom bankrupt, he expects the number of queries and new customers to climb. That's bad news for WorldCom executives, who are hoping a strong customer base will help keep the company intact when (and if) the company re-emerges from bankruptcy.

According to Peter Lucht, a WorldCom spokesperson, the Chapter 11 hasn't had any noticeable affect on its operations or its customer base.

"In the normal course of business, you see customers come and go all the time, but our key customers haven't left" he said. "It would be difficult to characterize how nervous our customers might be, but we're making it attractive to stay with us."

Favorable contacts are the best method to fight a common business practice: wooing customers from the competition. So far, the results aren't in, but the crisis at the world's largest Internet backbone provider has customers at least thinking about a new carrier, or backing up their network just in case.

Once WorldCom's difficulties started to emerge, out came the competition with phone calls, e-mails and other advertising to convince customers that the time to move its bandwidth was now, before it became too late.

Take, for example, Fiberlink, which recently put out a press release touting its "network of networks" business model, while positioning itself as a safe alternative for nervous WorldCom customers.

IDT rolled out the most ambitious strategy, announcing a "stabilization plan" only days after putting in a $5 billion bid for some of WorldCom's assets, leading some to speculate whether the plan was a ploy for more market share.

The surge in demand for WorldCom alternatives isn't limited to Technology Brokerage and IDT. Competitors around the country are reaping the profits of business that normally went to WorldCom. Like Broadband.com, many are simply queries, but a growing number of people are signing up for at least back-up service in the event of service performance issues.

"We offer a mix of services, but we've seen nearly triple the number of IP bandwidth-only inquiries coming in," said Grant Kirkwood of Los Angeles-based Mzima Networks. "Not surprisingly, every customer is multi-homing to multiple providers. That is only the case about 50 percent of the time ordinarily."