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MCI, Inc. - Communications Services -
Category Directory
(703)
886-5600
22001 Loudoun County Parkway
Ashburn, VA 2014
www.mci.com
Sales
$27.3
billion
Business Description
MCI,
Inc. is one of the world’s leading global communication companies,
providing a broad range of communication services in over 200 countries on
six continents. Each day, we serve thousands of businesses and government
entities throughout the world and provide voice and Internet communication
services for millions of consumer customers. We operate one of the most
extensive communications networks in the world, comprising approximately
100,000 route miles of network connections linking metropolitan centers and
various regions across North America, Europe, Asia, Latin America, the
Middle East, Africa and Australia. We own one of the most extensive Internet
protocol backbones, and we are one of the largest carriers of international
voice traffic. Since April 2003, our business has been conducted using the
brand name “MCI.”
Business Segments
We have operated primarily through three business units, each of which
focuses on the communication needs of customers in specific market segments:
• Business Markets serves large domestic and multinational businesses,
medium size domestic businesses, government agencies and other communication
carriers;
• Mass Markets serves residential and small size business customers; and
• International serves businesses, government entities and communication
carriers outside the United States.
Strategy
Our strategic objective is to become the industry leader in Internet, data
and voice communications. To achieve this objective, we aim to:
• Provide the highest levels of performance, security and reliability. We
offer the fastest speeds available for Internet and data communications, use
multiple layers of advanced security for communications on our network and
seek to maintain a higher level of network availability than any major
competitor. We are integrating multiple access methods, applications and
network protocols to provide maximum flexibility for satisfying our
customers’ communication needs.
• Deliver customer value through simplicity and innovation. We are
increasing the value of our services through bundling, managed services and
customized solutions. We are making it easier to do business with us by
simplifying our network architecture and further improving our customer
support. We are developing innovative technologies and services using our
Internet protocol expertise.
• Leverage both our global reach and our partners’ capabilities. We own and
operate one of the largest global communication networks and are enhancing
its capabilities to provide even more effective solutions for our customers.
We are working with partners to expand ways that customers can access our
networks, solve complex voice and data communication needs and purchase
network and application services.
• Actively lower our operating costs. We are lowering our costs so that we
are better positioned to offer our customers superior value in the network
facilities and associated services they obtain from us while earning a
sufficient return on our network investments. We believe this focus is
particularly important because we anticipate continued pressure on market
pricing.
• Position ourselves for the convergence of network communications and
computing. We believe that industry trends are leading to a convergence of
network communications and computing, and we see opportunities to develop a
global computing network through which we would help customers distribute
software applications, bill for usage and store and distribute data. Through
these opportunities, we expect to broaden our role in the communications,
data management, data delivery and information processing activities of our
customers.
• Build public trust. We are striving to restore and build trust through
strict adherence to the highest ethical standards in everything we do. Our
pursuit of high achievement will be coupled with careful attention to how
our achievements are attained.
Business Markets
Our Business Markets unit is one of the world’s leading providers of
services to meet the technologically complex data and voice communication
needs of large domestic and multinational businesses, medium-size domestic
businesses, as well as numerous federal, state, local and foreign government
entities. Business Markets also provides wholesale network capacity and
switching services to large Internet service providers, leading wireline and
wireless telephone companies and cable television companies.
The revenues of our Business Markets unit represented 51.7% of our
consolidated revenues in 2003, 54.3% in 2002 and 55.9% in 2001.
Services
Business Markets offers the following Internet, data, voice and managed
services to businesses and governments:
Internet Services
Business Markets offers a comprehensive range of alternatives for customers
to access the Internet. In addition, Business Markets provides sophisticated
value-added services that make Internet communications more economical,
efficient, reliable and secure as well as easier, faster and more effective
in conveying data, information and entertainment. Although not currently
comprising the largest portion of Business Markets’ revenues, Internet
services are an area of strategic focus that we are seeking to grow using
both our position as owner of one the most extensive Internet protocol
(“IP”) backbones as well as our considerable IP expertise.
Access services are built around our global Internet backbone providing
connectivity in more than 2,700 cities in over 200 countries. Business
Markets enables customers to access the Internet through dedicated broadband
lines with speeds ranging from 768 kilobits per second to Gigabit Ethernet
(equal to one billion bits per second) and up to OC-48 (2.5 billion bits per
second). For customers using dial-up access, Business Markets uses
approximately 2.1 million modems located throughout the world. Once
connected, the customer’s traffic is routed over our networks to the desired
location, whether on our network or elsewhere on the Internet.
Business Markets also provides Internet-based virtual private networks (“VPN”)
to customers desiring a high level of security when connecting their
operating facilities, data centers, remote sites or mobile users over the
public Internet. VPN services include encryption, bandwidth prioritization
and centralized continuous monitoring and management. Customers for these
services are attracted to the combination of using the low-cost public
Internet network with the reliability and security we provide.
For high-volume customers that desire a higher level of security and
reliability for their VPN networks, Business Markets provides private
Internet protocol (“PIP”) networks. We furnish PIP services using
multi-protocol label switching (“MPLS”) to deliver voice, data and video
traffic over our IP backbone network. Our use of MPLS also enables customers
to continue utilizing their existing non-IP data and voice networks as they
transition over time to operating on standard IP protocol.
In addition, Business Markets provides web hosting services that enable
customers to outsource portions of their Internet operations so that they
can more rapidly and cost-effectively provide online information and
business transaction capabilities to their own customers and to employees,
suppliers, investors and other interested parties. These services are
offered to customers directly by MCI and through our Digex subsidiary and
are provided through 169 standard data centers and 27 premium data centers
that operate 24 hours a day with enhanced service levels. The web hosting
services of Business Markets include technical support and performance
management for hardware, operating systems and applications. Other web
hosting services include database management, server collocation, storage
services, customized web site activity reporting, stress testing, firewall
management, virus detection and elimination and other enhanced security
services.
Internet services revenues of Business Markets were $2.2 billion (8.1% of
our consolidated revenues) in 2003, $3.7 billion (11.5% of our consolidated
revenues) in 2002 and $4.0 billion (10.7% of our consolidated revenues) in
2001.
Data Services
Business Markets uses our frame relay, asynchronous transfer mode and
Internet protocol networks to provide high bandwidth data transmission
services over both public and private networks.
Frame relay services allow cost-effective and secure high-speed
interconnection of data centers, local area networks, remote facilities,
branch offices, point of sale terminals and other sites that send or receive
data. Frame relay is a high-speed communications technology that divides the
information into frames or packets. Through our frame relay switches
strategically located in 47 countries and our correspondent relationships,
Business Markets offers frame relay services in over 70 countries. In
addition, our network access relationships with other communication
companies enable customers to access frame relay locations in most countries
in the world.
Asynchronous transfer mode (“ATM”) services enable the integration of data,
voice, video and multimedia communications over a single network. This
consolidation of applications onto one network reduces network, equipment
and operational costs. Through our ATM switches in 21 countries and
interconnects with other data networks, Business Markets can extend ATM
connectivity throughout most of the world.
For customers with high-volume data transmission requirements or the need
for heightened levels of security or availability, Business Markets provides
private line services in which a customer contracts for the use of a
specific circuit on a dedicated basis. The private line connects directly to
our network, thereby reducing originating access costs compared to using
“switched” access that is shared among many network users. Business Markets
offers dedicated circuits as Metro Private Lines between two points in a
single metropolitan area, Domestic Private Lines linking points within the
United States and International Private Lines connecting points around the
world.
For customers with less demanding data transmission requirements, Business
Markets connects the customers to our network using switched access. For
these services, Business Markets charges the customer based on the time that
its network and switch facilities are utilized.
Data services revenues of Business Markets were $6.1 billion (22.2% of our
consolidated revenues) in 2003, $7.6 billion (23.5% of our consolidated
revenues) in 2002 and $9.2 billion (24.4% of our consolidated revenues) in
2001.
Voice Communication Services
Through our local, long distance and international voice communication
services, the customers of Business Markets can call to anywhere in the
United States and to virtually any telephone number around the world.
High-volume customers are connected to our global voice network through
dedicated access lines, while lower volume customers are connected through
switched access provided either by us or an incumbent local exchange
carrier. Besides traditional telephone service, Business Markets also offers
its customers calling cards, voice messaging, speed dialing and information
service access.
In addition, Business Markets offers its customers the following value-added
voice communication services:
• Toll-free service—We provide basic toll-free service and enhanced service
with call routing based on the time of day or programmed to balance the use
of multiple service centers. We also supply voice recognition capability to
enable automated telephone access to databases and other electronic
information services.
• Conferencing—We provide audio and video teleconferencing on both an
automated basis and a moderator-assisted basis. In addition, we provide
web-based audio and video conferencing hosted over the Internet and operate
conferencing centers in the United States, the United Kingdom and Hong Kong.
• Bundled Voice Services—We offer local, long distance and international
calling services bundled with data or Internet services at pricing that is
more economical to customers than separate purchases. For example, voice
services may be bundled with Internet dial-up or private line access, with
firewall or other security services, or with a router and Internet access.
• Voice over Internet service—As one of our information services, we provide
multi-location customers in the United States with local, long distance and
international telephone service integrated with the customer’s IP network,
lowering the overall cost of a customer’s Internet and telephony
communications. Most of these voice-over-IP (“VoIP”) services are marketed
under the MCI Advantage product name. In addition, during December 2003, we
announced that Time Warner Cable had contracted for us to assist with the
provisioning of VoIP services to customers of Time Warner Cable in 13 U.S.
metropolitan areas.
MCI Solutions
The MCI Solutions group within Business Markets provides comprehensive
telecommunications industry expertise and broad understanding of network
technology to solve customer problems and facilitate successful execution of
their business operations. In addressing a customer’s specific needs, MCI
Solutions integrates specialized knowledge inside of our company with highly
regarded firms outside of our company that have leading positions in
relevant technical areas. We aim to deliver value-added solutions,
strengthen our relationship with customers and integrate our problem-solving
capabilities into the customer’s internal business process.
For customers interested in creating, expanding or altering their networks,
MCI Solutions provides network planning, design, implementation and
optimization services. This may involve the configuration and installation
of the customer’s equipment, the design of custom or dedicated network
operating centers and security services, including firewalls, virus
detection and elimination and the encryption of traffic over the customer’s
network for added security.
For customers operating contact centers, MCI Solutions offers a variety of
enhanced services for voice contacts as well as other contact mediums such
as email and web site contacts. These services include routing for work load
balancing among multiple contact centers and among individual agents, as
well as routing to match contacts with the skills of agents. Other services
include voice recognition and speech automation. During 2003, over one
billion minutes per month of enhanced voice calls were handled through these
services provided by MCI Solutions.
For customers that outsource all or portions of their communications
operations, MCI Solutions provides a variety of managed network services.
These services extend from the operation and maintenance of individual
network devices to the complete management of sophisticated global networks.
Activities conducted on behalf of our clients include network monitoring and
trouble-shooting, on-site repair services and the management of applications
such as e-mail and other business programs that are used across a business
enterprise or government agency. As of December 2003, we managed over 2,500
customer networks, including approximately 200,000 individual devices
located in over 120 countries.
We do not separately account for the revenues of our managed services and
solutions business. The revenues for this business are included in the
revenues noted above for our Internet, data and voice communication
services.
Mass Markets
Our Mass Markets business unit is a leading provider of voice telephone and
Internet communication services to residential and small business customers
in the United States. Subscription services include local, long distance,
and international calling, operator assisted calling, inbound toll-free
services, calling card services, collect calling and Internet access.
Transaction services include products such as 10-10-220, 10-10-987,
1-800-COLLECT and pre-paid calling cards.
Subscription Services
Mass Markets offers the following subscription services to consumers and
small businesses in the United States:
• Long Distance Voice Communications—Mass Markets offers domestic and
international long distance services to customers throughout the contiguous
48 states and in the District of Columbia. Customers of Mass Markets can
call anywhere within the United States and to over 200 countries throughout
the world.
• Local Voice Communications—Mass Markets offers local service plus added
features such as caller identification, call waiting, call forwarding,
three-way calling and voice mail in the contiguous 48 states and the
District of Columbia. Mass Markets provides local service primarily through
unbundled network elements leased from incumbent local exchange carriers
and, to a lesser extent, through MCI’s own switches. A recent court decision
may limit our ability to use unbundled network elements (see “Regulation”).
• High Speed Internet Access—In the second quarter of 2003, Mass Markets
began offering high speed Internet access through our own facilities and
also through resale arrangements with other providers. In December 2003,
such access was offered in 34 states and the District of Columbia.
Mass Markets has “The Neighborhood built by MCI” as its primary brand and
product portfolio, consisting of bundled local, long distance and Internet
subscription services. Using its knowledge and experience in segmenting the
consumer market, Mass Markets has designed variations of The Neighborhood
that appeal to consumers with varying telecommunications usage patterns and
lifestyle differences. Each of the variations bundles a unique combination
of services and targets a different price and feature level.
Subscription services revenues of Mass Markets were $5.3 billion (19.4% of
our consolidated revenues) in 2003, $6.2 billion (19.1% of our consolidated
revenues) in 2002 and $7.1 billion (18.9% of our consolidated revenues) in
2001.
Transaction Services
Mass Markets also provides transaction services where customers use long
distance services on a pay-per-use, non-subscription basis.
The transaction services of Mass Markets consist of the following five
branded offerings:
• 10-10-220—The primary feature of this dial-around offering is a block of
time for one flat rate. The product is offered through Telecom*USA, a
subsidiary of MCI.
• 1-800-COLLECT—This dial-around product was introduced in 1993 and
continues to serve customer needs as a convenient and economical alternative
to dialing zero.
• 10-10-321—This dial-around product was originally designed to reward
customers for longer-duration calls. In 2002, the product’s pricing was
changed to a flat rate per minute structure. This product is offered through
Telecom*USA.
• 10-10-987—This dial-around product is designed to provide a competitive
price point for value-oriented customers and is offered through Telecom*
USA.
• Prepaid Calling Cards—Prepaid calling cards are primarily distributed
through retailers, often using co-branded or retailer-branded cards.
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