Global Crossing rebounds from Q4

Despite the harsh economic climate, Global Crossing said today it is seeing no appreciable change in sales cycles among its enterprise customers, and it reported having already recovered from a sales dip it saw last November.

While trends across Global’s entire business were consistent in the fourth quarter, its North American enterprise business was the one exception. There Global averaged about $4 million per month in recurring orders last year (not including the impact of foreign currency exchange rate changes), but that number dipped about 10% in the fourth quarter to $3.6 million. In particular, orders dropped in November. But they rebounded quickly -- improving 15% sequentially in December and 20% (over November) in January, marking a return to levels seen in last year’s first three quarters.

“January doesn’t take us out of the woods, but it puts us back into the cautious mode,” said John Legere, Global Crossing’s chief executive officer, during the company’s fourth-quarter earnings report today.

The carrier is projecting overall revenue to grow in a mid to high single-digit percentage in 2009 (though foreign exchange rates could result in flat to declining revenue), after 15% growth last year and 4% growth in the fourth quarter.

Unlike some other telecom service providers, Global reported it has seen no appreciable elongation of sales cycles among its enterprise customers lately. Those customers see the migration from legacy to IP-based technologies that Global provides as a cost-cutting move that only becomes more urgent in tough times, the carrier said.

“Some of our sales teams right now are saying it ‘feels’ like sales cycles are lengthening; however, our data so far does not show a discernible difference,” Legere said. He cautioned that, in a cloudy market that has made analysts hungry for barometric information, anecdotal assessments are passing more rapidly than ever from front-line sales staff to analysts, and such assessments can be undependable.

“We have to be careful,” he said. “If you ask the sales team enough times, ‘Are you seeing a lengthening of sales cycles,’ you’re going to get the answer that [they’re] feeling something.”

Sales of indefeasible rights of use, or IRUs – essentially long-term leases of fiber capacity, paid for upfront – rose unexpectedly high in last year’s fourth quarter to a level Global Crossing doesn’t believe it will sustain in the new year.

During the call, the company also confirmed publicly for the first time plans to enter the content delivery networks (CDN) market, following analyst reports that the company had already partnered with EdgeCast. Global said it will resell CDN services from two or three partners with plans to eventually private label those services as Global Crossing’s own.

“We’ll see how much of that we bring in-house,” said Gary Breauninger, Global's executive vice president and chief administrative officer. “For the next 12 to 18 months, it’s probably just a resell effort.”

(For more information on how telecom carriers will participate in the CDN space, listen to this podcast with BitGravity CEO Perry Wu.)