WorldCom: Don't jump ship yet, says Gartner

WorldCom customers should not rush to an alternative telecoms supplier yet, but they should make contingency plans now, according...

WorldCom customers should not rush to an alternative telecoms supplier yet, but they should make contingency plans now, according to analyst group Gartner.

The US telecoms giant with a £2.5bn hole in its balance sheets will begin shedding 17,000 jobs this week. "At best, WorldCom's service quality will suffer - at worst, it could go bankrupt," said Gartner analyst Eric Paulak.

Major WorldCom clients in the UK include Barclays, BP, Compaq, Dell, Diageo, EDS, Goldman Sachs, the London Stock Exchange and Toyota.

Gartner's advice to businesses, in a FirstTake briefing note, echoes that given to customers of European telco KPNQWest, which filed for bankruptcy in late May. However, Paulak said, "the plight of WorldCom's customers is not as dire - yet."

The research group urged WorldCom customers to "document all their WorldCom services and total networking needs so that they can issue formal requests for proposals if needed".

It also urged a series of other practical steps:

  • Consider not signing up for any new WorldCom services until its financial situation is clearer and it is guaranteed to get some bank credit.

  • Sign six-month extensions for expiring contracts.

  • For Web sites hosted by WorldCom or Digex, start duplicating data and considering alternative hosts.

  • Evaluate how a second Internet service provider (ISP) might be used for Internet access as well as for WAN needs by deploying a virtual private network (VPN). Remember to turn on Ipsec (the secure Internet protocol) when creating a VPN.

  • Where there is no alternative ISP, order back-up dial-up ISDN services for key locations. These can be installed in a couple of weeks.

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