To: gizelle otero who wrote (6586 ) 6/20/2000 10:19:00 AM From: tayspop729 Respond to
Global Crossing Recoils From Equant Global Crossing, which is especially strong in its undersea cable assets and U.S. fiber network, is building a global services network, partnering with and buying companies that help it fill out its coverage and products when necessary. For example, in a deal worth about $2.1 billion, the carrier just bought both Ixnet, which operates a global financial services network, and its parent company IPC Communications, which runs a desktop trading network for financial firms. But under the surface, Global Crossing may be making haphazard moves to expand beyond its low-margin wholesale bandwidth business as soon as possible. "My concern with Global Crossing is that they?ve been doing a lot of buying and too little integrating," says Carl Garland, an analyst... Its most recent pursuit, Equant, is well focused on a number of products, including video conferencing, secure local area networking connections and mainframe migration services. Owning Equant would catapult Global Crossing into higher-margin services markets. "They?d be buying into a more lucrative space," says Garland. But instead of paying a premium for Equant, Global Crossing must act carefully (like a dot-com) under recent market scrutiny. "Any suggestion that a company is being too aggressive at the expense of relatively near-term profitability is likely to be badly received," says James Governor, an analyst... However, if Global Crossing sticks with its low-margin business of wholesaling bandwidth, the future looks cash poor. ...but investors must wonder if Global Crossing, relentless in its pursuit to own a global network, is cruising for a bruising.
