In the spotlight: Global Crossing’s Gary Breauninger

Gary Breauninger became executive vice president and chief marketing officer of Global Crossing in April, when his predecessor, Anthony Christie, moved to London to become managing director of Global Crossing’s United Kingdom and European operations. Breauninger previously oversaw Global Crossing’s financial operations as senior vice president for planning and business finance, with a particular focus on the operations aspect. His telecom career prior to Global Crossing includes 10 years at AT&T in sales, product management and customer care. Breauninger spoke with Editor-at-Large Carol Wilson.

On the current state of the competitivemarket: What we have seen probably over the last eight quarters is a trend that is very much stabilizing itself. I’m not saying that, in all products, we are seeing price increases. But across all product buckets, there is definitely a different trend. We see 15% to 20% year-over-year declines in private line, private ATM services and basic data services versus 60% two years ago. Along some routes, it is even more stabilized, the decline is in the low teens. There is more a rationalization of supply and demand. The growth in demand is for products like virtual private networks--these services provide much more value and are not commoditized. There, we see single-digit price declines or flat prices year over year on the route itself.

On industry consolidation: From a Global Crossing perspective, it fits nicely into what is going on in our business now. We are competing against much bigger companies, but we are now second or third considerationfor international capacity. We can serve as a technology refresh or a technology enforcer that companies use to keep the big buys honest. Most of third-party industry analysts are suggesting enterprise customers look at diversifying their carriers, and we can play that role.

On Global Crossing’s performance: Overall, we have increased sales productivity, increased the size of business, and increased growth--9% sequentially last quarter. If you play that into what we just acquired and closed on--Impsat [Fiber Networks, which operates 15 metropolitan networks and 15 data hosting centers in Latin America]--that brings us about 4500 customers, most of the large Latin American enterprises, to which we can then upsell and cross-sell opportunities we have from a Global Crossing perspective.

On the move to all-IP networking: Everyone is getting to the point that they know IP and the convergence to IP is the place to be. Every enterprise and carrier is talking about moving to IP. Who has the underlying infrastructure, IP native to the core? We go to 300 cities with IP at the core and another 300 with our partnerships. We have been a good two to three years in our design. We are able to deliver IP-MPLS-based service, security and managed services or video services.

On Ethernet as a future offering: I think that is definitely a viable alternative for the future, it was one of the things we realized early on. With FiberNet, we purchased a large amount of capability on an Ethernet product, and we are developing it across the globe. FiberNet provides us a nice acceleration into that market in North America. We realize that what we provide is a very robust Layer 3 VPN service that has been ahead of its time. If you move more to Layer 2 VPLS network with Ethernet, we realize that is the next wave for us as well.

On future network expansion: Our network is pretty robust, it is built out in all the major cities, we won’t do a whole lot of service expansion organically. We will invest in the core network, and the South America network where demand is good, and price points are more robust--we will double capacity down there in August.

On Global Crossing’s voice peering initiative: We will concentrate more at the end of this year and next year. It is not a substantial piece of the revenue debate, but it changes the game, driving cost savings by bypassing PSTN termination, and enabling us to deliver applications in an all-IP environment.. VoIP is growth area and voice peering is part of that. We feel pretty good about capitalizing on that the rest of the year. We have grown at more than 100% year over year, and at a faster rate in the first quarter over the fourth quarter.

On future plans: The thing we are going to concentrate on--stabilization, continued revenue growth and continuing to do what we do well and not try to be everything to everybody. We are focused on selling global IP services to multinational companies. I’m more in the blocking and tackling. We will polish some things off along the edges, the rest of this year or next year, but for the most part we are capitalizing on the space that we have made for ourselves. We have been looking across the board at new services--managed video, for example, is a place where we are working to provide additional capabilities for a service offering, more at the Layer 2 VPLS, but as a managed service across Layer 2 and Layer 3. If you look at what we have seen from a demand standpoint, more recently, most of the vast majority of RFPs have VPN and managed service requirements in them. We have done a lot of this in the U.K., and we want to replicate what we have done in the U.K. for the rest of the world. When you can take a managed component on top of a VPLS network – it is very profitable, very sticky. Once the customer makes an investment with you from a managed perspective, it is a high-value proposition for you and the customer.