MCI chairman and chief executive officer Michael Capellas has told technology investors that managed IP services would be the key to further sales growth among telcos.
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Capellas, speaking at the Needham & Company Annual Growth conference in New York, said global managed IP services revenues were expected to grow between 14% and 17% a year and reach $58bn (£31bn) by 2008.
MCI’s enterprise revenues currently make up 23% of the company’s total £2bn annual sales, although MCI saw enterprise sales decline 8% in the third quarter of last year when compared with the third quarter of 2003.
This reduction, along with larger reductions in sales in other parts of the business, was a result of removing older and less profitable services from its customer sales.
Capellas said MCI intended making up the shortfall with newer IP-based services, including managed IP networks in enterprises.
Capellas said, “We already manage 2,650 customer networks around the world, although now, many companies are not simply looking to complete wholesale outsourcing to a single supplier.
“Many now want to find particular suppliers for specific parts of their network.”
Capellas said that while new customers were always MCI’s target, he said the company was now also making sure it was offering the right services to “expand its IT footprint” in existing customers’ sites.
MCI would do this by not only offering managed services, but also network security and hosting services. Newer specific technologies cited by Capellas that would drive the IP services market included storage area networking, XML-based messaging, converged voice and data, instant messaging, video conferencing and video e-mail.