Far-flung and flourishing

While pundits await the predicted rise of the global supercarrier, many companies - including Primus Communications - are building global networks and customer bases from the ground up.

When Primus was founded in 1994, "We saw that the industry was fundamentally going to change from a number of factors, including global deregulation, new technologies and customer demand for better services," says Yousef Javadi, chief operating officer for Primus.

The company now has its own networks in 12 countries and has interconnected with local carriers in more than 30 nations. Revenues are running at $1 billion annually, including a 70/30 retail/wholesale split. About half of the company's revenues come from North America. "We're looking to build critical mass in all these countries," Javadi says, adding that Primus expects operations in each country to be profitable on a stand-alone basis.

At the same time, though, the company has special appeal to businesses that exchange a high volume of traffic with places that are on Primus' network. "The top 10 financial centers of the world are on-net to us," Javadi says. Not surprisingly, banks are a key customer group.

Earlier this year, Primus snapped up global carrier Telegroup, which got its start in the international callback market but encountered financial difficulties as it made the transition to other lines of business. "What was compelling to us were the distribution channels, the agent organization, that Telegroup had built," Javadi says. "The second thing it had done really well was agent support and back-office billing, which is all Web-based."

To date, Primus has invested $400 million in its network and expects to invest $400 million more during the next two to three years. The majority of that investment will go toward data. "We're building one backbone that can capture [voice and data]," Javadi says. "We have no legacy systems. The oldest equipment we have is three years old."

As for the supercarriers, "There's no question that size and scale matter in telecom," Javadi says. "But the market will always have an appetite for smaller carriers that are flexible and can move ahead of the pack and do things faster. Is Primus or somebody our size a sustainable business? I would say, `Absolutely.'"