Global Crossing released its Q4 2006 results on Thursday. There were no big surprises, with trends from the last few quarters continuing. It successfully achieved its goals of positive adjusted EBITDA and cash flow before the end of the year, and has seen healthy revenue growth in its core segment as well as improving (though still negative) profitability.
Ovum's US enterprise practice VP, Jan Dawson, comment:
Global Crossing has gone from being a struggling basket-case to one of the leading tier 2 players in both the
Because tier 2 players can't match their larger competitors on some of the key metrics, they have to find other ways to differentiate themselves. One of these is customer service, which Global Crossing has made a key goal.
Some enterprises complain that they don't receive the attention and service from tier 1 providers, who save their best service for only the biggest players. Global Crossing (along with Sprint and others) have been capitalising on this by focusing on providing flexibility, dynamism and customer service as differentiators to tier 2 enterprises. Global Crossing claims its efforts have paid off in its recent third-party customer satisfaction surveys.
Excellence in one or more specific areas is another opportunity for the tier 2 players. Global Crossing is still finding its way here, although it is focusing on its international presence with its acquisitions of Fibernet (UK) and Impsat (
Global Crossing has also done well to be more open than some of its competitors to partnerships with SIs. The 'co-opetition' model espoused by some service providers sometimes gives the impression of hugging the SIs while at the same time stabbing them in the back, and SIs respond accordingly. Global Crossing has made very clear that as yet it sees little merit in competing with them but plenty of opportunity in partnering with them, and that has opened some doors too.
The company still has work to do in establishing itself as the leading Tier 2 player. Its finances have improved to the extent where financial instability is less of a worry and it has been able to raise additional funding in the past year as a result, but it still isn't profitable. Achieving profitability at the operating and net income level has to be a major medium-term priority. But at the same time, Global Crossing needs to establish and reinforce the things it believes will allow it to stand out among the second-tier players in both the US and global enterprise markets.
Jan Dawson is based in Boston office, focusing on the North American and global enterprise markets.