Global Crossing on the Up?
Capacity Magazine, October 2007
Global Crossing’s (GLBC) second quarter results show that its inorganic strategy is beginning to have a positive impact, the company said, while measures taken to improve the cost structure are also contributing to the company’s strengthening financial performance.
The company posted a second quarter loss of $101 million, widening from $77 million a year earlier, and the carrier said it expects 2007 revenues of between $2.17 billion and $2.25 billion. The company has installed a new leadership team in Latin America – its purchase of Impsat was finalised in May – with the appointment of Hector Alonzo as managing director. In parallel, a new sales organisation and sales process has been implemented in Latin America, and customers have been assigned to the combined account management team. Latin American sales and product strategy now has a five-pronged approach: upselling Impsat customers on GC’s global connectivity; upselling GC customers on Impsat’s Latin American capabilities; cross-selling; extending GC’s product offfering to Impsat’s PoPs; and accelerating the development of Impsat’s value-added and data centre capabilities.
In the company’s quarterly newsletter CMO Gary Breauninger said: “Second quarter financial results included a positive contribution of $49 million in ‘invest and grow’ revenue and positive EBITDA contribution of $9 million from Impsat. Meanwhile, customers of Impsat have told us they are pleased with the merger.” The integration of the UK’s Fibernet is also progressing well with GCUK, Fibernet was bought in August last year. The company said that the Global Crossing UK business is stable and has been fortified with the addition of Fibernet. GCUK is generating approximately $30 million of adjusted cash EBITDA on average per quarter. During the second quarter, GCUK made progress with new and existing customer relationships. It started the quarter with two significant contracts, with Newsquest Media Group and OGCbuying.solutions. It also secured a contract from GfK Group, the fifth largest research organisation worldwide.
“We’re excited about the completion of the Fibernet integration. Integration costs are below what we expected and we’re beginning to realise cross-selling and upselling opportunities that will increase as our business matures, particularly as it relates to carrier data,” said John Legere, Global Crossing’s chief executive officer. “Based on the cost reductions we implemented during second quarter, the accelerating sales efforts of our GCUK team, and a focus on delivering a differentiated experience to our customers, we believe GCUK is well positioned for the second half of the year.” Separately investor Singapore Technologies Telemedia has increased its equity and voting interests in Global Crossing to 66.2%, converting $250 million of convertible notes into common stock as part of Global Crossing’s recapitalisation plan.
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