Jun 4, 2001 12:00 PM,

Jack McMaster

by Suzanne Sanders

Got the world on a string? Not very likely in these economic times. But being a global player in the promising virtual private network space might help. Enter Amsterdam-based KPNQwest, the joint venture between KPN and Qwest Communications.

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The facilities-based provider that offers data-centric services actually saw a fairly healthy first quarter. Revenue growth met expectations, up from fourth quarter 2000 revenues, and the company believes that EBIDTA will be positive by the end of 2001. KPNQwest had 150 IP VPN contracts signed in the first quarter and experienced 50% sequential growth in hosting. It lit the Swiss leg of its network last quarter, and its Paris cybercenter is now operational.

Jack McMaster, president and CEO, came to the company in 1998 after he had been executive vice president of Qwest's international unit. Although McMaster recognizes the downturn in the world economy, he feels confident about his company. “There is greater caution on behalf of businesses,” he says.

KPNQwest's IP-based VPN strategy is designed to save customers money. “The economics of working with us tend to be fairly competitive,” McMaster says. “We're seeing that in North America and we're seeing that in Europe.”

McMaster views his company as a survivor. “I bet that a year from now…several very worthy competitors aren't going to be here. We're in an economic ‘Survivor.’”

So what's KPNQwest's secret? “We're being very aggressive on the sales side,” McMaster says. “We're knocking on the doors of new customers and we no longer have to match price. We're also being very aggressive on the revenue side. We've scrubbed every one of our business cases.”

Moreover, McMaster says that KPNQwest has been able to keep up with demand, as shown by its first quarter results.

Perhaps most important, McMaster is making sure that KPNQwest is investing money back into the company. “If you go back 18 months,” McMaster says, “the focus was on being first to market. Now there is no longer a premium for being first, there is a premium for being fiscally strong.”