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Who gets your telecom dollars?

Feb 17, 20032 mins
Internet Service ProvidersNetworkingTelecommunications Industry

* Merrill Lynch surveys CTOs about telecom spending

Merrill Lynch this month released a study that shows enterprise users are cautiously approaching telecommunications spending this year. As well as covering how users will spend their telecom dollars in 2003 Merrill Lynch’s report also reveals what the 75 CTOs polled think of WorldCom.

In today’s newsletter we’ll focus on the spending and later this week we’ll look at the respondents’ views on WorldCom.

Although 56% of users said they expect their 2003 telecom service budget to mirror the previous year in terms of dollars spent, 41.3% said their budgets are changing.

Most respondents (22.6%) said they are renegotiating contracts to lower service costs but only 9.7% reported a lower telecom service budget for this year. While the number of users actually reducing their telecom spending this year is small, so is the number of users that may spend more.

The report says that about 9.6% of users plan to spend more on various WAN network expansions this year. 

Merrill Lynch also asked the CTOs who their primary and secondary service providers are today. AT&T by far leads in both categories.

The survey results show that 29.3% of CTOs use AT&T, 13.3% use Sprint and 10.7% use WorldCom as their primary service provider. AT&T is also the leading secondary provider with 22.4% of CTOs using the carrier. Somewhat surprisingly, SBC is in second place with 13.4% of respondents saying the local exchange carrier is their secondary provider. Sprint is third with 10.7% and WorldCom is fourth with 9% of businesses surveyed.

The majority of respondents (20%) say their primary service provider gets 90% of their business, while 16% said their primary service provider gets 85% of their business. Only 2.7% of CTOs say their primary service provider gets 100% of their business.

While Merrill Lynch certainly has access to some of the leading companies and their IT departments, we’re curious if their findings are in line with telecom spending at your company? Is your budget the same, lower or higher than last year?

And also, if you have primary and secondary carriers, how do you break down your spending?

Tune in later this week to read about how these CTOs view WorldCom.