February 21, 2000

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The Next Frontier
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In sharp contrast, MCI WorldCom has no wireless network--a prime driver behind its proposed merger with Sprint, which owns a nationwide PCS network. MCI WorldCom decided to gamble on winning approval for the merger, rather than building its own wireless network with limited reach. Like AT&T, it sees wireless voice as an immediate growth market, augmented later by Internet traffic.

Wireless is one technology that can be used to bypass the Bell-dominated local loop. Both AT&T and MCI WorldCom are using wireless and other options to address this market. AT&T has spent $116 billion to buy two cable companies, and it supplements its last-mile strategy by reselling digital subscriber lines in a handful of markets. MCI WorldCom has spent an undisclosed sum on fixed wireless companies, and it resells DSL service in many markets. MCI WorldCom expects to have fixed wireless systems operational in more than a dozen cities this year, and in 100 cities by the end of next year.

Although many of the last-mile efforts affect residential users more than business customers, both carriers say they're addressing the two markets. AT&T says cable, DSL, and the fixed wireless systems it's testing will provide more bandwidth to business customers. MCI WorldCom is relying heavily on fixed wireless for its business customers, and stands to gain more systems if its merger with Sprint is approved.

Regardless of what new market the carriers are eyeing, customers have one message for them: Get the basics right first. The budding supercarriers have taken some steps to address such concerns. They're using the Web to simplify time-consuming and often manual administrative processes.

For example, AT&T has created a Web site that lets customers report problems, order frame relay ports, and check the status of frame relay, private line, and voice services. Later this year, they'll be able to add asynchronous transfer mode ports and change the bandwidth on their circuits. "Next comes handling billing. That's the place where customers still ding us," Roscitt says.

But with MCI WorldCom also working hard in this area, it may come down to which company can deliver the highest-quality services and capabilities first. Later this year, MCI WorldCom will unveil a Web site that will let customers order services at the bandwidth they want and review bills that can be paid online, Briggs says.

MCI WorldCom last month unveiled two services that let IT managers dynamically add bandwidth to existing private lines and ATM links as well as adding links to additional sites. It's all done in seconds from a Web browser and an access link to a server in MCI WorldCom's network. "I see the carrier that succeeds in the next few years as the one that finds the most-efficient means for selling, provisioning connections, and providing customer service over the Internet," Sidgmore says.

Senior IT executives, noting that the strategies of the aspiring supercarriers are largely similar, say customer service, support, and delivery of competitively priced services will be the key differentiator among the top providers. "The true differentiator will be which carrier enables us to best use the Internet to fully monitor and manage all our services, because that will help us control operational costs," says Trinity Regional's Weider. "This would easily be the difference in deciding between two providers selling similar services at similar prices."

There's more to reversing the trend of declining customer service, however, than using the Web, says Brian Spears, IS director at $700 million office-equipment supplier Konica Business Technologies USA Inc. in Windsor, Conn. The company's MCI frame relay network was knocked out in August when a software glitch paralyzed the data service for roughly 3,000 customers for 10 days. He and others blasted MCI WorldCom for poor communications with customers during the lengthy problem, which resulted in the carrier taking steps to avoid a future calamity.

"Instead of carriers investing huge sums of money on marketing new services, they should be spending those funds on hiring and training people to become knowledgeable, versatile customer-service specialists," Spears says.

The supercarriers have made their strategies clear. The question is, can they expand their markets and serve their customers at the same time?

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Illustration by William Rieser

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