Slimmer Verizon retains Aussie muscle

Verizon's US$8.44 billion acquisition of MCI closed on 6 January, giving the telco an extensive international network as well as a number of large corporate customers and a footprint in countries like Australia where it had not previously operated.

Speaking with ZDNet Australia late last week, the telco's Sydney-based Asia-Pacific director of marketing, Darren Day, admitted some "small" local workforce trimming had taken place during the process.

"In Sydney we did lose some employees, primarily in the back office functions, that was the main thrust of changes," he said. The telco now has around 300 staff in Australia and New Zealand. The bulk of the Australian staff are based in Sydney and Melbourne, but the organisation has representation in Brisbane, Adelaide, Canberra and Perth.

Day said there was always going to be some "business re-vectoring" as part of the acquisition, with Verizon's non-US operations adding somewhere between 26,000 and 28,000 MCI employees to its existing count of 7,000-9,000. In the US, Verizon has another several hundred thousand employees.

But Verizon (which internationally focuses on enterprise customers as Verizon Business) has during the last six months also added some local customer notches to its belt.

"In New Zealand, we've just done a major customer, REANNZ, which is their research network, connecting them with Australia and the United States," said Day. REANNZ is the Research and Education Advanced Network of New Zealand, a new group set up to provide researchers with bandwidth.

"That's a major deal," Day added. "That will be like our second or third-biggest customer in Australia/NZ, going forward."

Existing local customers include Commsec, ABN AMRO, Ikea and public sector organisations.

"We're very strong in government, which is a legacy of some of the things we did in the OzEmail days, but we've continued to grow on that, and that's why we've got people in Canberra of course," said Day.

"I can't go into exactly which departments, but we've got quite a lot of business with them. The growing part of that business is the departments in government that need to be going global."

Day added Verizon continued to do business with education departments around the nation, which he described as "big users of bandwidth".

Like Equant (now Orange Business Services) and some other rival international telcos with operations Down Under, Verizon Business sees its core market as multinational corporations and local companies that want to expand overseas.

The company will soon start marketing its Verizon brand more strongly in Australia. "We've not spent quite enough establishing the Verizon name in these markets, but we're about to change that in the next six weeks with a whole bunch of advertising and billboards etc," said Day.

Eating its own dog food
On the infrastructure front, Verizon will in coming months become the first customer of the Voice over Internet Protocol (VoIP) product it is planning to launch in the October/November timeframe.

"It's based on the Broadsoft solution which most of our major competitors use as well," said Day. "We're going to have about 50 staff in our Sydney and Melbourne offices with the product, so we'll be the alpha customer."

"We'll be living our own product, which is something that telcos don't do enough of, so I'm actually feeling quite happy that we're going to get the opportunity -- even if it's only for six months -- to work with the product and use it."

On the VoIP front, Verizon has had some success already in the Asia-Pacific region, working on deals with VoIP hardware vendors Cisco and Avaya.

"We've done some hosted VoIP. And that's been particularly successful. We just sold one of our major premier customers as well, out of Hong Kong," Day said. "So we've been able to achieve quite a bit on VoIP already without a product of our own, but having our own product will certainly build our credibility in the space."

Further infrastructure deployments may also be in the pipeline. "We've got some business cases in at the moment to extend our MPLS (multiprotocol label switching) network," said Day, noting customers were strongly demanding MPLS-based products.

Verizon has direct points of presence in Sydney and Melbourne, but is examining the case to build new points in other cities such as Perth, Adelaide and Canberra.

"We're hoping to get the positive news on that in the very near future," said Day.

Broadly speaking in the Asian region, Verizon's network reaches all of the major countries, with coverage into Vietnam being implemented this November.