Transcript of CNBC interview (Denis, thanks for your help in pointing to the NASDAQ site, i didn't know the posted transcripts on CNBC there. However, your link didn't work for me. i think it is because it is of the frames.)
CNBC - SQUAWK BOX
INTERVIEW WITH GLOBAL CROSSING (GBLX) CEO ROBERT ANNUNZIATA
FEBRUARY 25, 1999
SUMMARY: Annunziata explains how to grow a market. Annunziata says the
company will use many vendors in the building of its transatlantic network.
Mark: Global Crossing didn't have to travel the world to find a new CEO. Yesterday
the company filled the post with Robert Annunziata, who left his job as president
of AT&T's business service group to take the position. As owner of the world's first
independent global fiber optic network. Global Crossing is definitely criss-crossing
the planet. The company is establishing systems that link the u.s. With Europe,
Asia, the Caribbean and Central and South America.
And following a record quarter, the company passed the $1 billion mark for
contract sales on its network. Wall Street applauded, sending the stock up
another four points yesterday to close at the high end of its range at 57. Here to
tell us he has planned for the company is Robert Annunziata, newly appointed
CEO of Global Crossing. Good morning let me ask about the way you finance this
kind of project. Part of it, you do part of it by selling dark fiber, customers literally
reserving space.
How much of that store, then, is given away?
Well, there's two aspect. You asked about financing. Financing Wall Street has
applauded us by giving us $4 billion to build these fiber optic systems. What
you're referring is to the capacity of services that we give and sell these products
and services to our subscribers. We have so much capacity but that's the way this
market goes forward to show they can have capacity through different points
around the world. We work with them to extend that high capacity broadband
service not just from the gateway to gateway but we're building within the continent
to bring them closer to users.
Mark: My point is, though, you're giving up a certain amount of pricing flexibility by
selling so far ahead of time?
Actually, people call that the wholesale market. Look at the wholesale market,
that's how you get started. Teleport we did the same thing. You get started with
the wholesale market, get them as anchor tenants, build out network, brings in
revenue and that's how you grow market.
You have a huge budget, a huge war chest arc loft money to spend. Lots of people
watch the show and say I would like to be able to find out who is going to make
money. Who are you buying equipment from? Who make it possible for to you do
what do you?
We buy equipment from many suppliers. Lucent us with transmission facilities as
we're building cables worldwide. This is like an unbelievable undersea cable
program. It's terrestrially within Europe, Asia, all the different marketplaces, we'll
use many vendors especially now with the Internet.
You built Teleport, made a fortune for people, sold to the AT&T. Build Global
Crossing, make a fortune and sell to the AT&T?
Well, you know, we do what's best for our shareholders, we grow the business, I'm
very excited about how big it can grow and dot on a global basis, there's no one
else doing it, we'll do what's best. We never rule out anything.
Mark: I'm glad you brought up the one of a kind to bring people up to speed. The
way these cables are usually constructed is their by consortium, companies
getting together, share the cost. This is the first one that's independently owned.
Your company before your arrival has gone to court and tried to block a
consortium transpacific cable to grounds it's anticompetitive. Are you challenging
the whole consortium way of doing this?
You found the way in the new global world.
Look at, that it's not much competition in the global marketplace. This is identical
in how I started in Teleport. When I went up against regional bell operating
companies not allowing competition, costs, we can be flexible and not be part of
the consortiums that don't go forward and don't provide quality you need in today's
high speed Internet. We will be able to provide this faster and compete against the
consortiums, what I did at telecourt.
Mark: You're taking aggressive legal action against the consortium. Are you trying
to get it so that anyone wants undersea cable, they have to have the hutspa you
had what you had to spend it, build with their own money?
If you look at this new world, if you want to be competitive, for your shareholders,
you've got to have hutspa... How does satellite communications fit in? Yes, I can
run my gigabits, whatever, across your transpacific cable but call Mr. Swartz at
local and bounce them off a satellite. What's the competitive aspect?
Generally it applies from one to many, how it's been used for the GEO stationary
satellites. The low orb tall satellites gives us flexibility for data. That's combination,
not just one medium that ever will be successful. However, with the fiber optic
global network, not just undersea but within the continents, we can provide high
speed Internet. We can provide same fast Internet service that's happening in the
United States worldwide. Satellites don't do that.
Mark: Thank you very much, appreciate your king, filling us in.
My pleasure.
Mark: That was Robert Annunziata, CEO at global crossing. Check back in with
you in a few months, once you've been behind the desk for awhile.
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