BASKING RIDGE, N.J. - Verizon Business again reported both sequential and year-over-year revenue growth during a quarter marked by a dramatic global expansion of the company's managed security business and its first major foray into fixed-mobile convergence services.
On July 30, Verizon Business reported second-quarter 2007 revenues of $5.3 billion, or growth of 2.4 percent compared with the second quarter of 2006 on an adjusted basis. This latest demonstration of the company's solid global execution represents Verizon Business' third consecutive quarter of accelerating, year-over-year, pro-forma revenue growth - a performance that continues to outpace other major U.S.-based enterprise carriers.
Global sales of strategic services such as Private IP, Ethernet and managed services continued to accelerate dramatically during the quarter, rising 25.5 percent year-over-year and 9.3 percent from the first quarter 2007, continuing to exceed declines in revenues from core services such as traditional voice and data.
"By once again delivering both overall and strategic services growth, we continue to stand apart from our competitors as we execute our global strategy," said John Killian, president of Verizon Business. "These results validate our strategy of providing secure, globally consistent facilities-based products and services backed up by the kind of care our multinational customers expect and require."
Security, FMC Initiatives Highlight Strategic Services Push
Verizon Business moved decisively on several fronts during the quarter to further increase its strategic services leadership.
On July 1, Verizon Business became the leading provider of managed information security services to business and government customers worldwide with the completion of its acquisition of Cybertrust, announced earlier in the quarter. By combining Cybertrust's global presence and customer base, focused security expertise and professional services with Verizon Business' "cloud-to-core" security portfolio, global IP network and financial strength, the acquisition created a powerful and unique player that is redefining the global security landscape.
The newly enhanced Verizon Business Security Solutions suite delivers end-to-end, multilayered security protection from the customer's premises to the Verizon Business global IP network. Offerings include professional services, premises and network-based Managed Security services, Identity and Access Management, Threat and Vulnerability Management, Partner Security programs and Security Certification programs.
Another key initiative during the quarter was the announcement of three new fixed-mobile convergence (FMC) services designed to help on-the-go professionals seamlessly bridge wireline and wireless networks -- PBX Mobile Extension, Mobile Conference Connection and Verizon Wireless' Wireless Office. Features include: a single phone number that simultaneously rings to an office, home and cell phone; a unified mailbox that consolidates voicemail from multiple devices; and instant conference calls that can be organized and initiated with just a few clicks on any Research in Motion BlackBerry or Microsoft Windows Mobile smart phone or PDA.
Wireless Office and PBX Mobile Extension are both currently available in the U.S. market, and Verizon Business plans to deploy PBX Mobile Extension internationally next year. Mobile Conference Connection, targeted for launch later this summer, will enable users to initiate and participate in conference calls from 150 countries.
The new FMC offerings are part of Verizon's overall business mobility strategy, which builds on the power of the company's expansive, world-class wireline and wireless networks and advanced collaboration services and expertise. The FMC offerings further bolster Verizon Business' comprehensive suite of Mobility offerings - which include wireless voice and data, managed wireless LAN and Secure Gateway -- enabling professionals to seamlessly and securely conduct business while away from the office.
Verizon Business announced during the quarter that it now has more than 2.5 million users for its Mobility Email and Data Access services, which help on-the-go workers connect to corporate resources. This major milestone, a two-fold increase since 2005, highlights the growing importance of flexible, simple and secure access for business users, and demonstrates the strengths of Verizon Business' Mobility Access services in meeting these needs globally.
Other significant enhancements to Verizon Business' global networking and managed service offerings during the quarter included: expanded availability of its VoIP (voice over Internet protocol) portfolio to the Australian market; availability of additional Application Aware network tools in Europe, Asia-Pacific and Latin America; expansion of country and local city audio conferencing access points; and direct IP Access to its Instant Meeting audio conferencing services for Verizon Private IP customers.
Additionally, Verizon Business and SoftBank Telecom announced a strategic alliance agreement during the quarter that benefits multinational customers of both companies doing business in Japan by enabling them to access the networks and capabilities of each company. Further, Verizon Business partnered with GXS, a leading provider of global business-to-business (B2B) e-commerce solutions, to enter the supply chain management arena.
Excellence Recognized by Industry Leaders
During the second quarter, Verizon Business was recognized by Gartner as a Leader in North American Help Desk Outsourcing for its delivery of help-desk outsourcing services. These services help client-companies handle technology issues and queries from their employees. Verizon Business also received the Cisco 2006 Global Managed Services Partner of the Year Award, as well as four other Cisco awards highlighting performance excellence and dedication to customer service.
For the second consecutive year, Verizon Business was recognized by the Metro Ethernet Forum as the 2007 Carrier Ethernet Service Provider of the Year, national category, for its excellence and leadership in the development, marketing and delivery of Carrier Ethernet business services to its customers. The Metro Ethernet Forum also cited the company's comprehensive and robust Ethernet portfolio, extensive geographic coverage and industry innovation.
Enhancements Further Strengthen Global Network
Verizon Business during the quarter again strengthened its global network with new investments and initiatives that underlie product innovations and operating efficiencies. Announcement included:
- Extending to 19 European cities Converged Packet Architecture (CPA), enabling multinational customers to more easily and efficiently scale bandwidth or make other adaptations. The company plans to continue its aggressive CPA deployment in the United States.
- Adding 6,000 more miles to its ultra long haul (ULH) network this year, surpassing the halfway point in the company's multiyear plan to deploy a 50,000-mile all-optical ULH network across the United States.
- Activating a private Internet protocol node in Cairo with TE Data, a unit of Telecom Egypt. The node offers customers with operations in the region a direct and secure high-performance link to the Verizon Business global IP network.
New Business Momentum Continues
Verizon Business continued to both solidify and extend its relationships with existing large businesses and government agencies around the world while adding new business.
- Companies extending master service agreements included the London Stock Exchange, Merrill Lynch and UBS. The London Stock Exchange signed a new three-year extension to its existing contract to enhance its global communications with fully managed Verizon Ethernet Private Line services, which will provide fast, secure and resilient delivery of critical data. The American Automobile Association, PNC and ING also completed new agreements with Verizon Business during the quarter.
- After being named a prime contractor for the U.S. General Services Administration's multibillion-dollar Networx Universal program in the first quarter, Verizon Business in late May was awarded a contract in the program's second part, Networx Enterprise.
- EDS, a leading global technology services company, completed a new agreement for Verizon Video Conferencing over Verizon Private IP to connect 10 of its sites across Australia and New Zealand. By increasing the use of video conferencing for employee collaboration, EDS aims to obtain a 25 per cent reduction in its carbon emissions by 2010.
- Intrepid Travel, an Australian-based global travel tour operator, will connect its operations in Australia, the United Kingdom, New Zealand, the United States and several countries across the Asia-Pacific region with Verizon Private IP, Verizon Internet Dedicated and Global Inbound Voice services.
- Healthe, a leading provider of health and wellness services, will implement Verizon Private IP and Verizon's Data Center Colocation and Managed Security services to link Healthe's Singapore headquarters with its primary business locations in Asia- Pacific and proposed locations in Europe, the Middle East and the United States.
- Mikron Technology Group, one of the world's leading providers of customer-specific manufacturing and assembly systems, has chosen Verizon Business to implement and manage a new communications network to link its offices in Europe, North America and Asia-Pacific. The Verizon Private IP network will enable Mikron to securely and efficiently exchange data and information across its global locations and also provides a flexible platform to support the company's future communications needs.
- Verizon Business is also enabling its customers to consolidate communications and prepare for future international growth. Such customers include Champ Cargosystems, the largest supplier in information technology to the air-cargo industry.
About Verizon Business
Verizon Business, a unit of Verizon Communications (NYSE: VZ), is a leading provider of advanced communications and information technology (IT) solutions to large business and government customers worldwide. Combining unsurpassed global network reach with advanced communications, security and other professional service capabilities, Verizon Business delivers innovative and seamless business solutions to customers around the world. For more information, visit www.verizonbusiness.com.