BASKING RIDGE, N.J. - Solid strategic execution powered by continuing product innovation and global network upgrades propelled Verizon Business to another quarter of positive year-over-year revenue growth that outpaced other major U.S.-based enterprise carriers. The company also posted both year-over-year and sequential revenue growth for strategic services such as Private IP, Ethernet and managed services both for the past quarter and every quarter since Verizon Business was created in January 2006.
"We maintained a sharp focus on expanding our strategic services offerings, enhancing global consistency among products and continuing to upgrade our network, and it's definitely paying off," said John Killian, president of Verizon Business. "Coupled with our unrelenting attention to consistent, high-quality customer care on a global basis, we expect to continue our efforts to grow our IP, managed and professional services."
Strategic Services Accelerate Growth
The strength of strategic services contributed greatly to Verizon Business' success during the quarter, rising 22.8 percent from the first quarter 2006. This strategic services growth exceeded declines in revenues from core services, such as traditional voice and data services - an important crossover point. Sales of strategic services were also up sequentially, increasing 2.0 percent from the fourth quarter 2006.
The company rolled out significant enhancements to its global networking and managed service offerings during the quarter, introducing new capabilities that underpin the ongoing global enterprise market shift to IP.
Specific actions included:
- An enhancement and deepening of Verizon Business' Private IP global footprint and expanded availability of Ethernet Private Line service to an additional six European countries. Verizon Business also became the first major carrier to introduce a much-anticipated Ethernet Virtual Private LAN Service (E-VPLS), which enables businesses and government agencies to easily and cost effectively extend their Ethernet local area networks and link their offices and work locations. Additionally, Verizon Business extended to Latin America the company's industry-leading service level agreements (SLAs) for managed wide area networks.
- Security continues to be a critical focus area for large corporate and government customers. Verizon Business further enhanced its industry-leading security capabilities with announcements during the quarter that included expansion of its network-based Denial of Service security offering to Europe; launch of Managed Web Content Services, which halt Internet threats such as phishing, spyware, malware and viruses; and introduction of its Secure Gateway - Firewall (custom) service, which for the first time enables U.S.-based multinational customers to centrally adjust security policies in real time across their global IP networks.
- Verizon Business also addressed the ongoing demand for business continuity solutions with the introduction of Notification Services and Planning and Incident Management Software to its Business Continuity Portfolio.
- Continuing to focus on performance excellence, Verizon Business successfully completed the SAS 70 Type II examination of its Internet colocation centers, known as Premium Data Centers. The company also successfully completed - for the sixth consecutive year - the SAS 70 Type II examination of its managed hosting centers, called Smart Centers, and their operating environments.
Leading industry authorities continued to recognize the power of the company's strategy and product portfolio during the quarter. Forrester Research ranked Verizon Business first in overall voice over Internet protocol (VoIP) strategy, while Frost & Sullivan awarded the company its Product Line Strategy Award for Enterprise wide area networking services and its Market Leadership Award for Hosted Interactive Voice Response services. Additionally, Gartner Inc. placed Verizon Business in the Leaders Quadrant among Asia-Pacific network service providers.
Global Network Enhancements Continue
Verizon Business continued to strengthen its global network with new investments and initiatives that lay the foundation for product innovations and operating efficiencies.
- Verizon Business deployed additional next-generation routers during the first quarter to enhance its global MPLS leadership position. This expanded the geographic reach to Calgary and provided additional capacity in existing markets to meet customer demand for Private IP. Ethernet access to Private IP was also activated in Malaysia.
- Further, Verizon Business expanded its network infrastructure capability to enable more than two-thirds of the U.S. population to use local and long-distance VoIP services, a more than twofold increase in the Verizon Business' U.S. VoIP footprint.
- Verizon Business filed a landing license application with the FCC to become the U.S. landing operator of the Trans-Pacific Express cable system between the United States and mainland China. TPE will use the latest optical technology to provide greater capacity and higher speeds to meet the dramatic increase in demand for IP, data and voice communications in the Asia-Pacific region where Verizon Business has many large business customers.
- The company also improved its public IP network capabilities by implementing a new regional peering agreement in the Asia-Pacific region that will enhance performance and reduce latency for large business and government customers in this region.
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.
- Verizon Business was named during the quarter as a prime contractor for the U.S. General Services Administration's 10-year, multibillion-dollar Networx Universal program, which is among the largest federal communications contracts in history. In addition, Verizon Business completed a new agreement with the state of California to provide services under the state's CALNET 2 program and, internationally, The Danish Foreign Ministry extended the locations and bandwidth of its existing global Verizon Private IP network.
- Verizon Business completed significant agreements during the quarter with companies including Bear Stearns, COOP Systems, Englobal, Harleysville Insurance and Rent-A-Center.
- Harleysville Insurance, a leading regional provider of insurance products and services for small to mid-sized businesses and individuals, signed an agreement with Verizon Business for a variety of services including Managed Private IP, audio, video and web conferencing, Internet and SONET.
- Rent-A-Center, the nation's largest home furnishings and appliance rental and leasing company, expanded its Private IP network with Verizon Business to assist with growth in stores and online applications.
- Englobal, a provider of engineering and systems services for the petroleum, gas, chemical, power, and petrochemical markets, and COOP Systems Inc., a provider of Web-based business-continuity planning services, each extended their contracts with Verizon Business to include world-class data center services and remote backup and restore capabilities. COOP Systems joins a growing list of software-as-a-service (SaaS) providers that are turning to Verizon Business to control infrastructure and maintenance costs and re-focus IT resources on customer service and software development.
- Verizon Business also won significant new business internationally during this quarter including Akzo Nobel, a global producer of coatings, chemicals and human and animal healthcare products will source its global fixed voice and audio/net conferencing solutions from Verizon Business and Getronics. Further new customer securing its communications infrastructure with Verizon Business includes Centre Informatique de L'etat.
- In the Asia Pacific region, Verizon Business extended its existing relationship to provide consolidated global IP communications infrastructure to Daiichi Sankyo, a leading Japanese pharmaceutical company. Philippine Airlines is implementing a fully managed Verizon Private IP solution to streamline and improve its communications infrastructure, and support future growth.
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.