Apr. 14--Dozens of telecom companies have gone into bankruptcy and many more are flirting with disaster. But it looks like a golden opportunity to Gregory Ewert, data services vice president at BCE Teleglobe.
"There's a vacuum in this industry right now, and I'd say there's a window of opportunity open," said Ewert, whose firm is the international division of Bell Canada Enterprises. "In eight to 18 months ... some of the companies now in bankruptcy will emerge--things will have shaken out. But right now, there are a lot of customers looking for service from someone they know will be around for the long haul."
For the past few years BCE Teleglobe has been acquiring network facilities. That has mostly meant purchasing capacity on existing fiber networks for extremely long-term contracts.
"There is so much excess capacity out there now, we'd have been nuts to add to the glut," said Ewert. "We could buy capacity at very low prices--less than replacement value, so that's what we did."
The firm had planned to spend $5 billion on its buildout, but ended up spending only about $3.5 billion to get the fiber capacity it requires. While BCE has a history of selling network service to other telecom carriers, now it also offers those services to large business customers with worldwide offices.
By supplying the newest technology available, BCE can offer customers about twice the bandwidth for half the cost of older systems, Ewert said. Other companies like Qwest Communications International Inc. and Level 3 Communications Inc. also have built advanced data networks, but those companies have run into trouble because their debt load is too big, he said.
"Right now, customers are looking for reliability above almost anything else," said Ewert. "They may never have heard of BCE Teleglobe, but when they learn we're owned by a $20 billion company, that reassures them."
Just as telecom networks are all interconnected, that's often true of the firms that operate them. Several years ago when Ameritech was a stand-alone company, its former chief executive, Richard Notebaert, bought a minority equity stake in Bell Canada, and when SBC Communications Inc. purchased Ameritech, it also got a small ownership in Bell Canada.
"We're kissing cousins with SBC, which owns more than 7 percent of us," said Ewert. "But that doesn't stop us from competing with them."
WEB BURGERS: "Would you like fries with that? And how about a chance to check your e-mail?" could become common questions for customers of three Pullman-area McDonald's restaurants in the near future.
The owner of three hamburger shops, Herb Bias, is going to install computer connectivity in his stores and provide free Saturday morning classes to teach people how to surf the Web and establish e-mail accounts.
Using refurbished computers, McDonald's customers who may not have computers at home will be able to participate in Internet-based activities.
"As business owners, we have an obligation to upgrade our communities," Bias said.
Participating in the program are Hot-Stops Corp., a Downers Grove-based provider of Internet connectivity to businesses and Allegiance Telecom, a competitive local phone carrier.
DIALING FOR DOLLARS: While advanced mobile phone services in the United States tend to lag behind the rest of the world, there still seems to be a lot of interest here in using cell phones to handle minor cash transactions such as paying transit fees and buying from vending machines.
About 38 percent of U.S. mobile phone users said they would welcome such "m-cash" transactions according to a survey conducted earlier this year by A.T. Kearney and the Judge Institute of Management at Cambridge University's Business School.
The survey, which queried 5,600 mobile phone users worldwide, found that 50 percent of those surveyed in Japan would like m-cash applications as would 46 percent in Europe. Overall, 44 percent of mobile phone customers worldwide voiced interest in the concept even though only about 2 percent had ever used their cell phone to perform a transaction.
As wireless carriers rollout advanced generation data services this year, they would be wise to heed this indications of customer interest in m-cash, said Paul Collins, the A. T. Kearney leader of the study.
"Consumer tastes in the mobile arena are fragile," said Collins, "so it is imperative that the community of mobile phone-makers, carriers, content providers and financial services companies rally quickly to provide mobile cash capabilities before consumer interest wanes."
ACCESS SUBSIDY BOOST: A slight increase in Illinois phone bills is in the works to support the agency that supplies the hard of hearing with special equipment to use their phones.
The Illinois Telecommunications Access Corp. currently receives 3 cents for each subscriber line in the state to support its programs, and it has applied to the Illinois Commerce Commission to boost that amount to 10 cents.
Over the years, this charge has fluctuated significantly, and sometimes it has been as high as 15 cents a line. Martin Cohen, executive director of the Citizens Utility Board, a consumer advocacy group, said the charges attract almost no attention from the public.
"I don't think we've ever gotten a complaint at CUB about it," Cohen said. "That's in stark contrast to the firestorm that was kicked up a few years back when the state proposed putting a similar charge--about 14 cents per line--on phone bills to subsidize service to the poor."
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(c) 2002, Chicago Tribune. Distributed by Knight Ridder/Tribune Business News.
TICKER SYMBOL(S): Q, LVLT, SBC, MCD
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