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Leaked report details WorldCom’s losses

Feb 03, 20032 mins
Internet Service ProvidersNetworking

* WorldCom continues to receive blows

Last week, a damning report was leaked to the press that detailed WorldCom’s sales figures for certain market segments. The report covers figures from June 2002 – one month before the carrier filed for bankruptcy protection – to December 2002.

The report, which can be viewed in its entirety at reveals that WorldCom’s revenue from new business between that period fell $400 million short of the $500 million that WorldCom had estimated.

While the report shows steep declines in new business, it seems that existing customers are sticking with WorldCom, for now anyway.

Part of the reason this report is important is because industry watchers don’t have a real barometer to determine how bad or good things are at WorldCom. When a company files for bankruptcy it no longer files quarterly earnings reports with the Securities and Exchange Commission.

Instead, WorldCom has been releasing monthly updates that include information on certain parts of the business. It is not by any means an equivalent to quarterly SEC filings.

So when this document came to light, which WorldCom verified was authentic in a “New York Times” article, industry watchers had some real figures with which to determine how WorldCom is doing.

Despite the fact that the carrier issued several press releases late last year that talked about new customer wins, the carrier’s new business is down.

But was this surprising news to most? While Capellas seems to be trying to get WorldCom’s ducks in a row, the company still is in the midst of bankruptcy proceedings. Capellas also made it clear a few weeks back that the SEC isn’t done investigating the company. And there is truly no way to predict if WorldCom will stay intact or if parts of the company will be sold off to satisfy creditors.

With all of that in mind, which service provider would you chose if you were migrating to a new IP VPN or Multi-protocol Label Switching frame relay service? This is not to say that WorldCom doesn’t have solid service offerings or good technology deployed in its networks. It is as competitive as the next guy, but no matter how you slice it there is still a lot of uncertainty around the company.