BroadWing leaves the nest: Cincinnati Bell, IXC hatch new image, strategy

Unveiling a new image as a predator in the national carrier territory, Cincinnati Bell and IXC Communications have chosen BroadWing as the name for the merged companies. BroadWing will combine Cincinnati Bell's reputation in the local market and IXC's global next generation network to offer expanded services to local and national customers.

By using IXC's high-speed Gemini 2000 IP network, BroadWing will provide Internet services, Web hosting, application management and multicasting to business customers across the country. The IP network also will allow BroadWing to expand services and products that Cincinnati Bell already delivers locally to national markets, including asymmetrical DSL (ADSL) and ZoomTown, its virtual online community geared toward ADSL users.

Named for the broad-winged hawk, which has laser-like vision and flies at 1000 feet to scout for prey, BroadWing will be "fearsome in its efficiency and determination," said Richard Ellenberger, president and CEO of the new company.

BroadWing's structure will allow for aggressive and entry into new business markets while continuing to offer residential services in Cincinnati under the Cincinnati Bell name, Ellenberger said. "We have the opportunity to take the innovation of Cincinnati Bell and a next generation IP network to a broader scale," he added, referring to the compatibility of the two companies.

BroadWing is big enough to offer a global IP network, thanks to IXC's partnership with PSINet, but it's small enough to be creative and grow quickly in data and IP services, Ellenberger said. "Customers are hungry for a responsive, focused and authentic carrier to take them into the next millennium," he said. BroadWing plans to offer bundled services, ADSL and one bill for multiple services. And through a partnership with e-Net, voice-over-IP services are planned.

The company faces a gargantuan task. Although BroadWing will have a strong pull in Cincinnati, "it will take an act of God" to make it a national player and threaten MCI WorldCom, AT&T or Sprint, said Mark Zohar, senior analyst for Forrester Research. "Cincinnati Bell has always been a good company but small. IXC has a good network but little contact with the end user," he said, adding that the challenge will be establishing new markets with business customers.

Outside the Cincinnati Bell region, BroadWing will have to work hard for brand recognition, said Kevin Mitchell, analyst of service providers for Infonetics Research. "IXC has a great next generation network, but it will be a challenge to educate the market." With so many competitive local exchange carriers (CLECs) popping up around the country all offering one-stop-shop services for small and medium-sized businesses, it's important for BroadWing to have strong brand recognition, Mitchell said.

Time to market also will be a challenge, Zohar said. To compete, BroadWing needs to set up points of presence quickly in key metro areas, make co-location agreements and get some "feet on the street," he said.

BroadWing may partner with CLECs and data LECs such as Covad Communications and NorthPoint Communications to get to market quicker, Zohar said. Plus BroadWing will have to make resale arrangements with wireless providers to offer a full bundle of services, he added.

On the positive side is BroadWing's carryover strategic relationship with PSINet. BroadWing can "leverage PSINet's base of users and come in behind PSINet to sell IP solutions and data services," Zohar said.

Ellenberger knows that alliances are key. Through the PSINet partnership, BroadWing holds a 17% equity in PSINet, which adds "strategic value" to BroadWing's future, he said. Although BroadWing has no plans to increase ownership, the companies continue to discuss enhancing the partnership.

Both the PSINet and e-Net partnerships will establish BroadWing as a power player, he said. The company plans to pursue other alliances to build its national presence.

Despite BroadWing's predatory imagery and strategies, when it comes to making MCI WorldCom "shake in its boots," Zohar said, "I think Bernie Ebbers slept all right last night."