MCI chief: Revenues depend on federal contract
- By L. Scott Tillett, L. Scott Tillett
- Jan 12, 2000
MCI WorldCom chief Bernard Ebbers said Wednesday he expects revenue growth for the company, but just how much depends in part on how swiftly federal agencies buy the company's telecommunication services.
Ebbers, speaking at the National Press Club in Washington, D.C., recently pegged the company's anticipated annual revenue growth at between 13.5 percent and 15.5 percent. For MCI WorldCom, a 2 percent difference in revenue amounts to hundreds of millions of dollars.
Ebbers explained that part of the reason for the wide margin of expected revenue growth is the unpredictable nature of the federal government's contract with MCI WorldCom. One year ago the company — as well as its merger partner, Sprint — won the $5 billion, eight-year FTS 2001 contract to supply long-distance telecommunication service to federal agencies.
Agencies do not have to use the FTS 2001 contract, but it should still represent big money for the two companies. Agencies' migration to FTS 2001, however, has been slower than expected.
"The delay of that rollout can affect our revenue to a certain extent," Ebbers said.
Ebbers also announced a new strategy for MCI WorldCom: delivery of "all-distance" telecommunication service, as opposed to strictly long-distance service or strictly local-access service. The move helps the company compete with other telecommunication giants such as Bell Atlantic Corp. — the East Coast local access provider that last month won government approval to offer long-distance service in New York.
"In about a month, MCI WorldCom will bring consumers our first all-distance service to compete with Bell Atlantic in New York," Ebbers said. "The details are still being worked out, but the package will include a large bucket of minutes — local or domestic long distance in any combination — for a fixed monthly fee."
Ebbers also announced plans for the company, following the merger with Sprint in the next year, to accelerate the deployment of broadband wireless telecommunications in rural and underserved areas, especially in the Southeast, Southwest, Pacific Northwest and Great Plains.