WilTel seeks share of massive federal telecom program

* Why WiTel thinks it's a good fit for the Networx program

In August, when bids are due for the U.S. federal government's massive Networx procurement, one of them is likely to be submitted by WilTel Communications. The Tulsa, Okla., ISP hopes to snare a piece of the 10-year, $20 billion Networx deal as part of an overall push into the federal government market.

Traditionally, the U.S. federal government has turned to the nation's top ISPs including MCI, Sprint, Qwest and AT&T for most of its telecom services. With Networx, the federal government is planning to award both Networx Universal contracts to top-tier carriers as well as Networx Enterprise contracts to smaller, niche ISPs. WilTel hopes to be one of the Enterprise winners when contracts are awarded in spring 2006.

I spoke recently with WilTel CEO Jeff Storey about his company's interest in Networx and its overall strategy in the U.S. federal market. Here are excerpts from our conversation:

Q: What is WilTel's strategy regarding the federal Networx program?

A: Our strategy with the federal government is to go in and do the things we do best. We're not going to bid on Networx Universal; that's not something we can do. We will partner with others that are bidding on Universal as a subcontractor to their offerings. But WilTel is not in a position to bid on Universal directly.

On Networx Enterprise, that is where we will spend some time and effort and try to go directly to the federal government. We think we have the level of sophistication and the [next-generation] offerings that the government wants. Our way of doing business is particularly suited to the enterprise portions of Networx.

We are very good at being the WAN experts for our customers. We listen to our customers extremely well, and then we take our technology and network and figure out how we can support their applications. The companies that are going to be very successful in Networx Enterprise are going to be good at doing engineered applications for specific solutions.

One of our other verticals is the media and entertainment industry, which we support through our Vyvx subsidiary. Vyvx has handled the Super Bowl 16 years in a row and the Academy Awards 15 years in a row. We are the major player for broadcast quality transmission over fiber. We work very carefully with our customers to create solutions to meet their needs. That's what I think Networx Enterprise is all about.

Networx Enterprise is key to WilTel's strategy going forward. I think the changes that [the federal government] made in the Enterprise RFP are clear indications that the government wants choice. They don't just want SBC/AT&T or MCI/Verizon. They want choice from companies that can really be nimble, push the technology and push their capabilities and can provide a level of service that's above the rest.

Q: WilTel launched its federal marketing push last year, and since then has won a Department of Defense contract worth as much as $35 million. Can you describe WilTel's current presence in the federal market?

A: We do have federal business but mostly as a subcontractor to somebody else. We're the key provider on four or five major network initiatives in both the civilian and defense agencies. The type of stuff we're good at is data over the WAN. We've not historically done voice for the government, but [in June] we announced retail voice services that we'll begin offering to the government as well.

We have viewed the federal sector as a pretty significant vertical just like the ISPs. We've seen a number of carriers that have come in to that market and gone out. We have no intention of doing that. We're very pleased with the growth we're seeing.

Q: How key is winning Networx to WilTel's overall strategy?

A: It's a component. If you look at our business, we have four or five different vertical or product-oriented businesses. Our Vyvx business is the media business. We have an advertising distribution business where we distribute television ads. We have our private line business. We have our voice business. We have vertical markets, which are federal, education and healthcare. So winning Networx is a component to our strategy, but it's not the end. If we win Networx, we can't sit back and be happy. If we lose Networx, we won't sit around and be sad. It's a nice thing for us to win.

Q:  If you don't win Networx, will you stick with the federal market?

A: Absolutely. I'd like to see a few winners on Networx Enterprise, but not a ton. If they only have a few winners, I think WilTel will be one of them. With the types of things that the government wants and the way they want to work with the vendors, I think WilTel is perfect for them. We do the services they want and we do them very well according to third-party industry surveys. We think we're a perfect fit for Networx.

Learn more about this topic

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