Capellas looks to the future

MCI CEO Michael Capellas this week mapped out the carrier’s 18-month product plan only days after receiving some of the best news the carrier has probably heard in well over a year.

MCI  CEO Michael Capellas this week mapped out the carrier’s 18-month product plan only days after receiving some of the best news the carrier has probably heard in well over a year.

In an address at the Yankee Telecom Forum on Monday, Capellas said MCI’s future product directions center around developments in security, managed services and product bundles. His remarks followed the approval of MCI’s reorganization plan by the U.S. Bankruptcy Court last Friday. Capellas says the carrier will likely emerge from bankruptcy by January.

MCI has been working on its product roadmap for a long time behind the scenes, Capellas says. 

“We’re great believers in do things first and talk about them second,” he says. “So we’re not going to get ahead of our headlights.”

Security and managed services will lead that product portfolio.

“We are going to be pushing … our managed services effort,” Capellas says. “Obviously with Rick Roscitt (COO at MCI) we have a guy who’s been there before. We have a huge installed base with 3,200 networks that we manage today.”

“You’ll see us step up on the whole world of security,” Capellas says. “The next generation of security has to be in the network and it has to be tiered.”

The carrier is also looking to beef-up its consumer and business service bundles through wireless partnerships.

“There is no question that wireless, bundled with local, long-distance and Internet access, becomes a dominant player,” Capellas says.

While MCI offers the latter three pieces of the bundle, it’s still missing wireless, but perhaps not for long. MCI is exploring partnerships with some of the nations largest wireless service providers.

“We have had informal chats with a few people in the industry,” Capellas says. But an announcement isn’t imminent, he says.

When asked which wireless operators the carrier is in talks with, Capellas says it’s a pretty short list.

“If you go through the six (largest national providers), a couple of them are associated with RBOCs and that’s relatively unlikely, and a couple of them aren’t. It’s not very hard to figure out,” he says.

From that, it’s likely that MCI has been talking with T-Mobile and Nextel.

In addition to mapping out the future from a product perspective, Capellas once again tried to squelch rumors that the carrier will start a price war once it emerges from bankruptcy. He says this is not the company’s intention.

MCI’s margins are lower than its closest competitor AT&T, Capellas says. He attributes it to a difference in accounting and higher expenses from operating multiple billing systems and networks.

MCI also has significant monthly expenses from its reorganization. MCI spent nearly $50 million last month on reorganization costs, which include accounting and legal costs.

“That’s a lot of money,” Capellas says.