MCI Ireland weathers bankruptcy storm

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1 April 2005 | 0

Despite losing EUR116.8m in 2002, following the bankruptcy of its US parent, MCI Ireland (formerly MCI Worldcom) is continuing to hold its Irish market share and retain customers, according to its Irish indirect channel director, Paul O’Farrell.

The company had experienced a 10 per cent dip in revenues for 2002 from EUR34.8m in 2001 to EUR31.2m, which, added to exceptional write-off charges worth more than EUR110m, resulted in a EUR116.8m loss for MCI Ireland in the year ending 2002.

Speaking to Channels, O’Farrell said that the company was keen to distance itself from the bankruptcy issues of its US parent in the eyes of its approximately 5,000 Irish customers.

‘We educated our partners and customers and kept them up to date about what was happening, he said. ‘We basically had to sit tight for a while and turn to a customer retention mode.’
By his own account, this retention mode has been successful. O’Farrell says its top 50 customers in Ireland have all stayed with the company. However, he acknowledged that had bigger customers, which house huge amounts of their IT infrastructures within MCI, moved to an alternative provider on account of MCI long-term viability worries, this would have presented a considerable logistical challenge.

O’Farrell reports that the channel continues to work well in Ireland for MCI, particularly given the large SME profile of the country. MCI employs over 100 people in Ireland in four offices in Dublin, Galway, Limerick and Cork. Restructuring has resulted in a staff reduction from 2001 levels when MCI employed up to 178 staff. MCI’s channel sales team is now staffed by five who work with 25 Irish business partners. Approximately 25 per cent of MCI’s business is through the indirect channel.

The MCI group recently disclosed that it expects to emerge from Chapter 11 bankruptcy protection soon and that a plan has been in place for some time to ensure a successful transition, including applying to bid once again for US federal government contracts. O’Farrell said the main obstacles to emerging from bankruptcy have been surmounted.

As an ISP and global network provider, MCI claims the largest Internet network in the world based on 4,500 POPs (points of presence). It offers voice, data and Internet services along with large scale Web hosting. O’Farrell says savings of up to 20 per cent over equivalent services from Eircom are achievable through MCI. The other advantage to having such a large global network is that MCI manages its voice calls from end-to-end rather than passed to another carrier, thus ensuring better quality.

08/03/04

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