Growth, Strong Execution Mark Successful First Year for Verizon Business

BASKING RIDGE, N.J. - Verizon Business celebrates its first anniversary Monday (Jan. 8), capping a year during which it combined the strengths of Verizon's and MCI's enterprise offerings, expanded those offerings globally and demonstrated strong sequential revenue growth.

The company executed strongly in its inaugural year even as it continued to transform itself to support the enterprise market shift to IP (Internet protocol)-based products and services.

Verizon Business demonstrated overall revenue growth sequentially for the first three quarters of 2006 - the only major U.S.-based enterprise carrier to show such growth in that period.  During that time, the company also posted revenue growth for strategic services such as IP that surpassed the industry average.  

"The success we demonstrated in our first year reflects the strength of the merger and the solid execution of a sound strategy," said John Killian, president of Verizon Business.  "Looking ahead, we will continue to optimize and globalize our core network business while pressing forward to grow our IP, managed and professional services."

Operational Successes Mark Verizon Business' First Year

With its market launch last January, Verizon Business hit the ground running and built momentum with each passing month.  The company unveiled numerous products and services that meet customers' advanced communications and information technology needs. 

Highlights of Verizon Business' first year include:

  • Expanding Ethernet service offerings in the United States, Europe and the Asia-Pacific region; and offering Ethernet access to the Verizon Business Private IP global network.  Verizon Business earned numerous industry awards for its leading global Ethernet portfolio.

  • Expanding its U.S. voice-over-IP (VoIP) offerings and introducing a consistent suite of VoIP services to six European countries (adding Belgium and Luxembourg to the United Kingdom, France, Germany and the Netherlands) to deliver an international VoIP portfolio.  Additionally, Verizon Business introduced new IP Toll-free and IP IVR (interactive voice recognition) capabilities for its Contact Center Services to help businesses enhance their customer service initiatives and leverage the benefits of VoIP.

  • Opening a new Government Network Operations and Security Center dedicated to supporting the unique security and operational requirements of Verizon Business' federal government customers.

  • Launching a fully integrated Customer Center and introducing a Dashboard feature that helps customers more simply and effectively manage their Verizon Business services.

  • Introducing a Business Resilience portfolio that addresses the growing need for business continuity preparedness to help businesses maintain vital communications and operations system capabilities during unforeseen events.

  • Signing an agreement with five major Asia-Pacific carriers to build the first multi-terabit direct cable system linking China and the U.S.  This initiative, called the Trans-Pacific Express, highlights Verizon Business' global presence and growth.

Several leading industry authorities recognized the power of Verizon Business' go-to-market strategy and product portfolio during the company's first year.  For example, Verizon Business was listed as a Leader in the Gartner Magic Quadrant* for U.S. Managed and Professional Network Service Providers, as well as for U.S. Network Service Providers of voice and data communications.  Additionally, J.D. Power and Associates cited the company as providing the Highest Customer Satisfaction with Large Enterprise Business Data Service Providers.**

Winning Strategy Helps Drive Revenue, Sales Growth

Supporting the company's growth in enterprise services is a focus on strategic services - IP, IT, Ethernet and managed and professional services.  Verizon Business' revenues for these strategic services increased 4.7 percent from the second quarter to the third and nearly 25 percent year-over-year.  This performance is outpacing the industry.

Verizon Business Managed Services - which enable customers to have the company manage a portion or all of their networking and computing infrastructure - are a big part of this growth story.  As more companies move from traditional corporate data networks to converged IP networks capable of handling voice, video and data, there is a growing interest in the full range of network management solutions offered by Verizon Business.  In fact, nearly 40 percent of customers purchasing Private IP, Verizon Business' fastest-growing service, are choosing a Managed Private IP service.

Global Network Expansion Continues

Verizon Business unit also continued its aggressive global IP network expansion, deployment of strategic network technology programs and strong focus on IT initiatives to benefit its customers.  For example, the company took advantage of network synergies by moving to the Verizon Business network voice and IP traffic that was carried on the networks of third-party providers for the former Verizon Global Network Services.  By keeping more traffic directly on its network in more places around the world, Verizon Business is able to achieve better performance and economies of scale for its customers.

In 2006, the company expanded its global Private IP MPLS-based network to 116 countries around the globe.  Additionally, Verizon Business expanded its capacity and reach into Southeast Asia, India, the Middle East, Western Europe, the Asia-Pacific region and China. Verizon Business also is involved in more than 65 submarine cable network systems worldwide and in 2006 was the first carrier to provide six-way diversity of routing by fully meshing its Atlantic undersea cable.

In addition to global network expansion, Verizon Business continued its deployment of strategic network programs including Ultra Long Haul (ULH) and Converged Packet Access (CPA) in the U.S.  The company added more than 5,800 ULH miles to its network, bringing the total ULH miles to more than 24,000. ULH provides high levels of resiliency and performance on the network. 

Strategic Imperatives for 2007

In 2007, Verizon Business will continue to be a leader in IP networking, further improving performance and replicating its capabilities and offerings around the globe.  Simultaneously, the company will sharpen its focus on offering IT, managed and professional services that leverage the power of the Verizon Business IP network, again with an eye toward expanding the company's global presence.

"Changing customer requirements and technology are driving the convergence of previously distinct industries - network services, IT services and professional services," Killian said.  "Our current strengths and focused strategy position us to capture the opportunity created by market dynamics and global trends."

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 technology and professional service capabilities, Verizon Business delivers innovative and seamless business solutions to customers around the world.  For more information, visit www.verizonbusiness.com.


* The Magic Quadrant is copyrighted June 2006 by Gartner, Inc. and is reused with permission. The Magic Quadrant is a graphical representation of a marketplace at and for a specific time period. It depicts Gartner's analysis of how certain vendors measure against criteria for that marketplace, as defined by Gartner. Gartner does not endorse any vendor, product or service depicted in the Magic Quadrant, and does not advise technology users to select only those vendors placed in the "Leaders" quadrant. The Magic Quadrant is intended solely as a research tool, and is not meant to be a specific guide to action. Gartner disclaims all warranties, express or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose

** Verizon received the highest numerical score among data service providers in the proprietary J.D. Power and Associates 2006 Major Provider Business Telecommunications Data Services StudySM. Study based on 3,138 total responses measuring 6 providers and measures opinions of consumers utilizing telecom services at small/midsize and large enterprise U.S. businesses.  Proprietary study results are based on experiences and perceptions of consumers surveyed in January 2006.  Your experiences may vary. Visit jdpower.com.