WorldCom seeks fresh beginning

As the telecom giant formerly known as WorldCom Inc. struggles to reinvent itself with a new identity and a new reorganization plan filed April 14, analysts say the firm's position as a federal contractor is likely to remain strong — but not unchanged.

The company, now calling itself MCI, is moving its corporate headquarters from Mississippi to Ashburn, Va., and announced April 14 that it hired Robert Blakely as chief financial officer.

Blakely has held the CFO post at other firms and recently completed a four-year appointment as a member of the Financial Accounting Standards Advisory Council, which advises the Financial Accounting Standards Board on issues relating to financial reporting and disclosure. The board is the designated private-sector body that develops standards of financial accounting and reporting, recognized as authoritative by the Securities and Exchange Commission.

The company has weathered a serious storm, said Warren Suss, president of Suss Consulting Inc.

One challenge facing all telecom companies is systems integration, he said. MCI sold off an integration unit in 1999, before its financial woes began. "Coming out of Chapter 11, they're going to be very strong in their traditional core network services, even managed network services," Suss said.

"They will not be burdened by the debt they were burdened with before," he added. "They will be in a strong position to pick up business."

However, telecom companies compete against systems integrators, not just other telecom firms, he said. "The question in my mind is have they lost the ability to expand the range of skills and services they provide. Many federal requirements are now going beyond transmission."

MCI spokeswoman Natasha Haubold said the firm intends to be strongly competitive. "Some of our strengths are our unmatched technology skills and our people," she said.

The company has extensive experience at both the federal and state government levels, she added.


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