Global Crossing customers should fight for a better deal

Collapsed telecoms firm Global Crossing is hoping to emerge from chapter 11 bankruptcy protection early next year. It filed a...

Collapsed telecoms firm Global Crossing is hoping to emerge from chapter 11 bankruptcy protection early next year. It filed a plan with the US Securities & Exchange Commission last week.

Analysts have said that telecoms customers should press former bankrupt service providers to pass on the benefits if they reorganise.

In the case of Global Crossing there is scope for such deals because of the low prices that will be paid for its assets under the bankruptcy plan. The $407m (£271m) deal will give a 61.5% share to Hutchison Whampoa and Singapore Technologies Telemedia, the remaining 38.5% going to the carrier's creditors.

The buying price is a bargain compared to the estimated asset value of $22.4bn when the company declared debts of $6bn and bankruptcy earlier this year. So it has been suggested that customers should press Global Crossing and other telecoms companies emerging from chapter 11 protection for more favourable deals.

Gartner analyst Maureen Coulter said, "Customers can expect better deals - but not brilliant deals. Rescued telecoms operators will be streamlined and will have cut back on the range of services offered. There may be room to get better deals on price but it is more likely that customers can get better bundled or longer-term contracts." Coulter added that the better finances of reorganised telcos existed alongside reduced competition, so the best strategy was to have two suppliers and play them off against one another to win better deals.

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