MCI's competitive wiles

MCI today announced it's bringing VoIP to business DSL users in 31 markets -- a surprising announcement for a company that you would normally expect to be licking its wounds so soon after emerging from bankruptcy. In fact, MCI hasn't been acting at all like a crippled post-Chapter 11 firm. Out of the gate barely a month, MCI has made several new service announcements, expanding on its portfolio of access, security and managed services for enterprises, while making extremely aggressive pushes into the small and medium business space. The VoIP over DSL announcement was just the latest in that chain.

A lot of carriers are piping mad that MCI got off with a fine -- albeit a large one -- and is now free to make merry war on them without the nagging burden of billions of dollars of debt. Let's face it: MCI did get a pretty good deal in court, but by no means is the company in the clear. Last month, MCI revised downward its already impressive 2004 financial guidance, predicting lower revenues in its first year out of bankruptcy than for its full year in.

Oddly enough, MCI hasn't taken its precarious financial position as a sign to buckle down. As the company emerged from bankruptcy, Michael Capellas spoke about rejuvenating the company by tackling new markets, and that speech appears to have been more than just a pep talk. MCI legitimately seems set to be a major player in the small and medium market. The carrier may not launch the price war that industry experts predicted it would post-bankruptcy, but it's certainly initiating a turf war.

Every RBOC, IXC and Tier II-and-smaller carrier has been eyeballing those smaller businesses for the last two years -- the same years MCI was mired in bankruptcy. But when it came down to actually deploying services targeted at those businesses, MCI somehow has managed to beat most of them out of the gate.

Contact me at kfitchard@primediabusiness.com