Verizon Business Reaches New Managed Services Milestone

BASKING RIDGE, N.J. - With thousands of large-business and government customers trusting their global networking, security and hosting requirements to Verizon Business, the company has reached a new milestone: It now manages more than 250,000 customer communications devices around the world.

As part of managing these devices, Verizon Business hosts thousands of Internet-based applications and Web sites for marquee-name customers, provides network security for some of the world's largest businesses and government agencies, and manages more than 3,700 customer networks in 142 countries.  The number of devices being managed - including servers, routers, firewalls and other security systems - continues to grow rapidly as enterprise customers realize the benefits of turning to a trusted expert to keep their communications infrastructure functioning smoothly round-the-clock.

"Acceptance among businesses of outsourcing critical IT services management is reaching new heights," said John Killian, president of Verizon Business.  "As networks become ever more fundamental to the way our customers conduct business, they are evaluating how to best manage their communications infrastructure.  Round-the-clock management and oversight is no longer optional - even one minute of downtime is a minute too many."

According to industry analyst firm Gartner Inc., "By 2010, 60 percent of U.S.-based enterprises will outsource the management and operation of part, or all, of their corporate networks, up from 30 percent in 2006."¹ Globally, 47 percent of Verizon Business customers using the company's flagship offering, Private IP, opt for full management.

In 1989, a Verizon Business predecessor company signed its first managed services contract.  Today, Verizon Business manages customer networks around the globe for enterprises such as, Avis Budget Group, MEI and the U.S. Postal Service, and has added 614 new customers in just the past 18 months.  A worldwide staff of more than 9,600 provides operations, field, implementation, project management, design and professional, and specialized services, managing more than 80 different technologies and network connections from more than 60 network service providers.

Strong Investment Drives Customer Experience, Business Transformation

"Our continued investment in managed services enables Verizon Business to deliver an enhanced customer experience and help customers transform their businesses," said Nancy Gofus, senior vice president and chief marketing officer, Verizon Business.  "Deployment of automated systems and network management centers around the globe keeps us close to our customers while enabling them to take the complexity out of managing their networks and applications.  All of this can contribute to an advantage in today's fast-paced global economy."

Over the past two years, Verizon Business has invested more than $150 million in its IMPACT management platform, leading to the establishment of industry-leading service level commitments.  Verizon Business offers U.S.-based managed network services customers an actual time-to-repair commitment of 3.5 hours; the majority of its competitors still offer a mean time-to-repair.  IMPACT's rapid fault-isolation capabilities enable Verizon Business to consistently beat its own repair commitments.  In the first four months of 2007, the average time-to-repair stands at one hour and 49 minutes.

In addition, the Verizon Business Customer Center (VBCC) provides customers with a secure, easy-to-navigate desktop resource to manage services purchased from Verizon Business.  The VBCC is organized by five common, task-oriented functions: ordering, invoicing, repair, network tools and resources - offering customers a high degree of control and visibility.  The Verizon Business Dashboard, accessed directly from the VBCC, has a powerful graphical interface and provides near-real-time information about network health and status.  

Today, Verizon Business has operations centers around the globe, providing network, managed services and security services monitoring.  In addition, the company maintains more than 200 data centers that provide customer hosting and application management services.

Managed Services Adoption Drives Strong Financial Performance

Strong customer adoption of managed services continues to drive strong financial performance for Verizon Business. 

In the first quarter of 2007, revenue growth at Verizon Business was driven by continued momentum in the sale of strategic services such as managed and Internet protocol-based services.  Strategic services sales for the quarter generated $1.2 billion in revenue, up 22.8 percent from the year-earlier period on a pro-forma basis.  Year-over-year revenue growth from strategic services generated more than $200 million, exceeding declines in core services.

Sales of strategic services grew sequentially from the fourth quarter of 2006 and accounted for 22 percent of overall business-unit revenues in the first quarter of 2007.

Comprehensive Portfolio of Managed Services

Verizon Business offers a comprehensive portfolio of managed services, including the following network, security and hosting services: Wide Area Network Management, Local Area Network Management, Telephony Management, Managed Mobility, Telecom Expense Management Application Management, Managed Security Solutions, Data Center Services, Help Desk Services, Managed Hosting and Managed Messaging.

In addition, Verizon Business provides a broad range of professional services, including engineering, analysis, project management, assessment, design, capacity planning and strategic planning services.  The company also offers managed business applications addressing supply chain management, as well as vertical market capabilities for health care and business continuity.

Verizon Business has a proven commitment to quality.  The processes and methodologies used to support its managed services portfolio have received a number of standards-based certifications, including ISO 9001: 2000, ISO 27001: 2005, ITIL, Underwriters Laboratories, SAS70 Type I & II and TL9000.  In addition, the company holds multiple certifications from industry-leading vendors, including Cisco, Microsoft and SysTrust.

Verizon Business' industry-leading service-level commitments and award-winning IMPACT management platform underscore a legacy of service and innovation.  The company is the recipient of the 2006 Frost & Sullivan Customer Service Leadership Award for Managed Services and the 2006 Cisco Systems Global Managed Services Partner of the Year Award.  It has also been listed by Gartner Inc. in the leaders quadrant of a report titled "Magic Quadrant for U.S. Managed and Professional Network Service Providers, 1H06."¹*

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 July 11, 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.

NOTE: This news release contains statements about expected future events and financial results that are forward-looking and subject to risks and uncertainties. For those statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.  The following important factors could affect future results and could cause those results to differ materially from those expressed in the forward-looking statements: materially adverse changes in economic and industry conditions and labor matters, including workforce levels and labor negotiations, and any resulting financial and/or operational impact, in the markets served by us or by companies in which we have substantial investments; material changes in available technology, including disruption of our suppliers' provisioning of critical products and services; technology substitution; an adverse change in the ratings afforded our debt securities by nationally accredited ratings organizations; the final results of federal and state regulatory proceedings concerning our provision of retail and wholesale services and judicial review of those results; the effects of competition in our markets; the timing, scope and financial impacts of our deployment of fiber-to-the-premises broadband technology; the ability of Verizon Wireless to continue to obtain sufficient spectrum resources; changes in our accounting assumptions that regulatory agencies, including the SEC, may require or that result from changes in the accounting rules or their application, which could result in an impact on earnings; the timing of the completion of the sale of our Latin American property; and the extent and timing of our ability to obtain revenue enhancements and cost savings following our business combination with MCI, Inc.

¹ Gartner Research "Magic Quadrant for U.S. Managed and Professional Network Service Providers, 1H06" by E. Goodness, D. Neil and D. Willis.  July 11, 2006