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SWIFT Taps Global Crossing for Secure IP Network

Global Crossing Ltd. Tuesday beat out the competition to partner with SWIFT, the banking industry's wire transfer backbone. Industry analysts are calling the deal -- which is worth a minimum of $300 million in revenue for Global Crossing -- a major win for the fiber-optic network giant.

"...not only is this contract financially rewarding for GX, but we see it as yet another confirmation of the company's continuing progress in capitalizing on its first to market position with its infrastructure and with its global IP-VPN capabilities," Goldman Sachs said.

"While $300 million is the minimum amount, Global Crossing expects to realize between $500 to $600 million from the network side alone; $50 to $60 million of which should be booked this year."

Under the deal, SWIFT -- whose customers send out more than five million messages valued at an estimated $5 trillion every business day -- will sub-contract its network operations to Global Crossing. Global Crossing will manage the development and operation of SWIFT's Secure IP Network (SIPN) infrastructure as a Virtual Private Network (VPN) within its existing IP extranet infrastructure. Global Crossing will also take responsibility for maintaining SWIFT's current X.25 network which will eventually be replaced by the SIPN. SWIFT said the deal would allow it to sharpen its focus on messaging services, transaction processing and standards setting while Global Crossing ensures that SWIFT's customers will have the highest levels of availability, reliability and security through its IP network. At the same time, the deal is intended to deliver lower costs and faster time to market.

The companies also signed off on a channel sales agreement, allowing SWIFT to provide its customers with a one-stop-shop for local loop access and managed customer premises equipment end-to-end, as well as broadband, Internet and VPN services.

"A key operations goal for SWIFT is to deliver secure, high-quality solutions to our customers as quickly as possible," said Joe Eng, SWIFT's chief information officer. "Under this unique partnership arrangement, SWIFT will co-design, co-implement, co-test and co-manage the network with Global Crossing, but our customers will continue to have a single provider, a single network and a single point of contact. It's a win-win-win situation."

According to Goldman Sachs, SWIFT's decision to go with Global Crossing did not come down to pricing issues but rather focused on existing facilities and the ability to offer global services.

"The final decision was between GX and Radiant-Equant, with Global Crossing emerging the victor, not only because they have the necessary assets in place, but because they can also offer value-added services on top of the network," Goldman Sachs said.