BASKING RIDGE, N.J. - Verizon Business further reinforced its position as a global IP leader and network-based solutions partner for global corporations and government agencies during the fourth quarter of 2007. The company again achieved year-over-year and sequential revenue growth in the highly competitive multinational corporate and government marketplace as it continued to enhance its already unrivaled portfolio of global communications and information technology solutions.
Verizon Business generated fourth-quarter 2007 revenues of $5.4 billion, or growth of 0.5 percent compared with the fourth quarter of 2006 on an adjusted basis (non-GAAP).* This represents Verizon Business' fifth consecutive quarter of year-over-year, pro-forma revenue growth. Full-year 2007 Verizon Business revenue was $21.2 billion, a 1.8 percent increase over full-year 2006 revenue of $20.9 billion.
Global sales of strategic services such as IP, Ethernet and managed services continued to accelerate dramatically during the past quarter, exceeding declines in revenue on a year-to-date basis from traditional core voice and data services. In the fourth quarter 2007, strategic services generated $1.4 billion in revenue, up 25.1 percent from the fourth quarter 2006. Strategic services revenue was also up sequentially, increasing 4.7 percent from the third quarter 2007.
"Verizon Business is executing well as we continue to sharpen our focus on multinational corporations and deepen our global capabilities in security and other key strategic areas," said John Killian, president of Verizon Business. "Whether it's an end-to-end global solution or a key stand-alone communications service, we are bringing the power of IP to bear in helping our customers do business better."
Enhancements to Communications, IT Solutions Suite
Verizon Business continued to widen and deepen its leading product and service portfolio during the quarter, bringing customers the leading-edge communications and IT solutions that can give them a competitive edge in the global marketplace.
The company introduced new capabilities during the quarter that enable customers to better leverage voice-over-Internet protocol communications. Enhancements to Verizon Business' IP Trunking service included on-demand sharing of unused trunk capacity, support for additional IP PBX (private branch exchange) platforms, a new path to VoIP through its Ethernet to Private IP access option, and automated rerouting of calls to help maintain business continuity. Verizon Business also announced the availability of its Managed IP PBX service on the Nortel IP telephony platform -- an expansion of the company's already extensive portfolio of managed network services that simplify the transition to VoIP.
In addition to important new VoIP-related service enhancements, Verizon Business during the quarter expanded the global availability of its market-leading Ethernet capabilities. The company expanded Ethernet access to its Private IP service in Canada, Latin America and additional European countries, and expanded European availability of its Ethernet Private Line service to the Czech Republic, Greece, Hungary, Portugal and Slovakia. Also, the company introduced support for access speeds as high as 1,000 megabits per second (Mbps) in select European and Asia-Pacific countries. Verizon Business Ethernet access is now available in nearly 40 countries worldwide -- nearly double the availability since the start of 2007.
Further expanding its communications and IT solutions leadership, Verizon Business during the quarter rolled out a new Managed WAN Optimization Service that accelerates global delivery of widely used applications, providing standard performance of corporate applications across wide area networks. The company also announced that its Remote Application Management Operations Centers passed the SAS 70 Type II examination, underscoring their high performance and reliability. The company also introduced a new portable satellite service for enterprise customers, provided jointly with Thrane & Thrane.
Verizon Business also continued to expand its world-class security capabilities during the quarter. The company began offering retailers and financial service providers even stronger safeguards for protecting credit card holders' confidential data by successfully implementing the Payment Card Industry (PCI) Data Security Standard into its two U.S. Managed Hosting Smart Centers and achieving compliance with the Visa U.S.A. Cardholder Information Security Program (CISP) for its Transaction Services Network.
Verizon Business continued to focus during the quarter on making it easier to do business with the company, announcing both new and improved state-of-the-art self-service tools. The company rolled out further improvements to its Verizon Business Customer Center portal and announced two eBonding enhancements that enable customers to more easily link their systems directly to those of Verizon Business to automate manual business processes. Additionally, the company introduced BillManager 4.0, a software application that enables IT managers to more easily and securely analyze, report on and manage their communications expenses in an electronic format.
Global Market Recognizes Verizon Business Leadership
Industry experts and partners alike continued to recognize the depth and breadth of Verizon Business' global capabilities during the quarter. Recognition included:
- Frost & Sullivan's 2007 North American Award for Market Penetration Leadership in managed security services (MSS).
- Several awards related to the company's Ethernet services, including the Metro Ethernet Forum's 2007 European Carrier Ethernet Service Provider of the Year Award for Service Innovation, the Heavy Reading Ethernet Provider of the Year Award for Market Leadership, and the Light Reading Leading Lights Best New Service Award - Public Company for its Virtual Private LAN Service (VPLS).
- China Telecom naming Verizon Business as its Most Valuable Partner 2007 in recognition of the companies' cooperation in the delivery of international data services.
Network Leadership Continues to Advance
Verizon Business again during the quarter continued to expand and enhance its global IP network, which serves as the critical platform for the company's secure communications and IT solutions. During the quarter, the company:
- Enhanced the reach and capabilities of its network across South Asia, announcing the availability of additional Private IP nodes in the Philippines and Malaysia. These new facilities provide customers there an expanded direct and secure, high-performance link to the Verizon Business global IP network.
- Successfully concluded the industry's first field test of 100 gigabits per second (Gbps) optical transmission, carrying a live feed from Verizon's national FiOS TV network.
- Moved to quadruple the speed on its backbone network circuits, increasing the speed from 10 Gbps to 40 Gbps between more major U.S. cities.
- Began an aggressive rollout of its next-generation ultra long-haul (ULH) optical transport network in Europe. The first phase will include deploying ULH equipment, which will support speeds as high as 40 Gbps, on network routes between Verizon Business' European network hubs in London, Amsterdam, Frankfurt, Paris and Brussels.
- Opened a new Smart Center in Frankfurt to support customers with complex computing requirements in continental Europe, extending the reach of the comprehensive, high-end managed services and managed-hosting capabilities already available to Verizon Business' global customers.
- Completed the landing work for the Trans-Pacific Express (TPE) submarine cable at Nedonna Beach, Ore.
New Business Momentum
Verizon Business continued to both solidify and extend its relationships with existing large businesses and government agencies around the world while adding new business.
Multinational corporations and major regional players -- including CEDES, First Data Corporation, infoUSA, Invacare, Investec Limited, Labinal (SAFRON Group), The Menarini Group and Travel and Transport -- completed agreements during the quarter for a wide range of advanced communications, IT and professional services. In addition, the company signed new agreements with several U.S. government agencies, including the U.S. Postal Service and U.S. Coast Guard, and with JANET, which operates and develops the U.K.'s JANET education and research network. Companies extending their master service agreements during the quarter included Arivia.kom and Xtrion/Melexis.
Specific customer applications included:
- Arivia.kom, a leading South African IT solutions and services provider, has extended its contract with Verizon Business to enhance its existing communications. By using Verizon Internet Dedicated Access, Arivia.kom will increase communications bandwidth throughout its local operations. Additional use of Verizon Business hosting facilities and security services will help increase the company's overall business resilience.
- CEDES, the developer and manufacturer of innovative sensor solutions, will use Verizon Private IP to link its headquarters in Switzerland with its subsidiaries in China, Germany, Singapore and the United States.
- Verizon Business has become the primary provider of customer premises equipment (CPE) and maintenance services for First Data Corporation under a new three-year, $16 million agreement. The new deal deepens and expands Verizon Business' existing relationship with First Data, a leading provider of electronic commerce and payment solutions for businesses worldwide, under which it provides a wide range of global communications and IT services.
- The U.S. General Services Administration in the quarter selected Verizon Business as one of the companies to be awarded the Washington Interagency Telecommunications System (WITS 3) contract under which Washington D.C.-area federal government agencies can obtain a broad array of local telecommunications services and products. Verizon Business also won business under the GSA's Networx Universal contract, with the U.S. Postal Service selecting the company for voice services and the U.S. Coast Guard signing up for voice and data services.
- The leading provider of business and consumer databases for sales leads and mailing lists, infoUSA, completed an agreement during the quarter for a wide range of products and services. Verizon Business will provide infoUSA with Private IP, conferencing, local and Internet services as well as customer premises equipment.
- The Menarini Group, the leading Italian pharmaceutical group, is consolidating its global communications network over Verizon Private IP, linking its offices in Europe, the Middle East, Africa and South America.
- Travel and Transport, the sixth-largest U.S. travel management company, signed an agreement with Verizon Business for a variety of services including Private IP, Managed Network, Managed Email, Internet, Toll Free and customer premises equipment to help deliver on its mission to provide leading edge technology and customized travel solutions.
- Xtrion/Melexis, a leader in the semiconductor industry, will deploy a fully managed Verizon Private IP solution to enhance its communications capabilities between its offices in Europe and the U.S., and provide a platform on which to build future applications such as VoIP
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.
* See www.verizon.com/investor for reconciliations to generally accepted accounting principles (GAAP) for the non-GAAP financial measures included in this announcement.