WorldCom Inc. made a new-product pitch this week, even as the troubled carrier told a bankruptcy court that it would need five more months to put together a financial reorganization plan.
The product announcement atop the bankruptcy development “looks suspicious,” said Bill Moore, president of the New York-based Communication Managers Association, a user group of 75 companies. “All the telcos’ numbers are so bad that they are looking to get whatever publicity they can find anywhere.”
WorldCom requested the five-month extension Oct. 22, saying it needs until April, instead of next month, to file a reorganization plan.
“Everybody wonders if WorldCom is even going to be there in six months,” Moore said.
Les Kumagai, a spokesman for WorldCom, said it’s common for companies in Chapter 11 bankruptcy proceedings to seek extensions, and customers shouldn’t be concerned. “We are confident that our request will be granted,” Kumagai said. He said the product announcements, along with the US$1 billion in cash available to the company atop US$1.1 billion in debtor possession financing, show that WorldCom’s “ongoing business is strong.”
WorldCom announced WorldCom Dedicated Analysis, an Internet-access monitoring tool using technology from Visual Networks Inc. in Rockville, Md. It also announced a standards-based Internet access service, called WorldCom NxT1 Service, for providing bandwidth levels between those of T1 and T3 lines. The offering uses a customer premises router from Tasman Networks Inc. in San Jose.
Although Moore said the NxT1 offering is “potentially valuable” to users, he added that the fact the technology comes from other vendors is “a way for them to generate more revenue without much of a new product and not a lot of R&D.”
But Kumagai said WorldCom is doing a lot of research and development despite the Chapter 11 filing in July. He declined to disclose the amount of WorldCom’s R&D investment, however.
Steven Harris, an analyst at IDC in Framingham, Mass., said the announcements show that the company “is definitely thinking for the long term,” and he urged customers to think of WorldCom products separately from its financial problems.
The Internet monitoring tool lets companies monitor service levels and dropped packets on the local loop — from a central office to the customer premises — which is something few carriers have done, Harris said. Carriers typically provide monitoring tools only for the network infrastructure, not the last few hundred yards of a connection to a company premise, he explained.
