Moving Boldly to Become a Telecom Industry Force
Not long ago, upstart Global Crossing was a tiny speck on the telecommunications frontier. But with a soaring stock price and a string of bold moves, the 2-year-old company and its Los Angeles-based executives have catapulted themselves into the spotlight in an industry filled with powerful players.
Global Crossing intends to stay in that spotlight as it works to move beyond its mainstay transoceanic fiber business to become an international telecommunications powerhouse.
That plan was bolstered by its announcement Monday that it would acquire Global Marine, the undersea cable services unit of Britain’s Cable & Wireless, as well as last month’s deal to buy Frontier Corp., a full-service phone carrier and the fifth-largest long-distance company in the United States, for $11.2 billion in stock.
Global Crossing’s shares jumped $3.44 to close at $56.31 on Nasdaq. The stock has rocketed from its initial offering price of $9.50 a share in August, adjusted for a stock split.
Robert Annunziata, the company’s chief executive, promises more expansion. No stranger to the telecommunications business, Annunziata was recruited to the Hamilton, Bermuda-based company from AT&T; Corp., where he was a top executive. He also founded and ran local phone company Teleport Communications Group until it was acquired by AT&T.;
In an interview with The Times, Annunziata talked about Global Crossing and its future.
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Question: Why did you decide to leave AT&T; for Global Crossing?
Answer: This company is serving a major niche in the marketplace by building its own cables. And it’s really needed, with all the bandwidth that’s going to be required to serve all the societies around the world with high-speed Internet and data. I saw a new opportunity and I moved quickly. This is an opportunity for me to run my own business again.
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Q: You’ve been at Global Crossing for two months, and the company’s announced two acquisitions. What’s the rush?
A: It’s a dynamic marketplace. Every week there are more telecommunications alliances and mergers taking place. I guess it’s just my nature, and the nature of the management team that’s here--to do what’s right and do it quickly.
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Q: Global Crossing has at least seven executives at the top of the firm. Won’t that create leadership conflicts?
A: I don’t think it’s an issue at all. People keep forgetting that this is a global company, and we need a lot of talent and expertise to help us achieve all the multiple penetrations we’re going to do in various markets and then the acquisitions we do. This cannot just be done by a few people.
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Q: Global Crossing is predominantly an undersea fiber network company. What will it be in the future?
A: We’ve now moved ourselves into a different space in telecommunications, with the Frontier acquisition. That helps us do products and services in the United States--it gives us a local footprint, a long-distance footprint, IP [Internet protocols] and data. It’s taken us out of the niche market and put us into that big market.
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Q: Do you plan to offer business customers the full menu of telecommunications services?
A: To handle their basic transmissions, especially for multinational customers, we now can provide them services worldwide on our own facilities end to end, where others cannot. Also, we will work on building overseas direct links to large-volume multinational clients.
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Q: You still have some holes in your global network, don’t you?
A: Not too many. The uniqueness of Global Crossing is that we have physical fiber-optic facilities under sea and in the continents. That’s different than planning them; they are actually built and being built. But we’ve got a couple more ideas on the drawing board. Give me some more time. We’re quickly analyzing what is the right thing to do next.
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Q: What’s the forecast then, for Global Crossing?
A: Global Crossing clearly will be a major player, long-term, in the telecommunications and data marketplace because of the huge footprint that we’re building worldwide.
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Q: Do you plan to rival AT&T; and others?
A: I think all of us are now going after the $440-billion marketplace that’s out there for local, long-distance and international voice and data service.
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Q: You think you can pull this off?
A: Absolutely. I started Teleport with only five people. I’m ahead here, because I’ve got 200 [employees].
