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.”
