Jonathan Crane, Mci
Byline: Ed Gubbins
When Jonathan Crane, MCI’s executive vice president of strategy and marketing, was asked to participate in this report, he wanted to know how its subjects would be pictured: “Are you going to put people in a coffin, or maybe in a coal mine, gasping for air?”
Image is Crane’s industry. As MCI’s branding czar, he’s responsible for the deluge of advertising the company has unleashed in recent weeks. He promised that will abate once people learn to separate MCI from that other company – the one whose failure and fraud led to the biggest bankruptcy in U.S. history.
Perhaps the most urgent part of MCI’s branding resurrection is its race to recover the small and medium-sized business clients that fled during the bankruptcy. (How many? “We haven’t been very public about that number, even if we knew it,” said Crane.) To win them back, MCI is hiring more than 1000 account reps to hold hands with these customers, whose modest monthly bills (less than $1000) never before warranted the attention. Though some analysts are unsure of its cost-effectiveness, Crane insists the extra effort will help MCI reclaim the trust of the customer sector.
“People didn’t leave us because we weren’t providing them competitive value. They left for other reasons,” he said. “Now that the bankruptcy is being cleared up, they’ll come back for the same reason they bought from us in the first place.”
MCI is also banking on Advantage, a suite of IP services that includes follow-me and voice over IP. In May, Crane predicted the 200 to 300 customers Advantage had then would soon swell into the thousands, but analysts question the suite’s scalability because efforts to fully integrate the IP backbone of UUNet (another revived brand) have stalled.
Meanwhile, MCI is facing harsh competition in the residential arena, where the RBOCs (which Crane calls “price-war mongers”) are bundling DSL with all-distance voice. By now MCI will be using the acquired assets of defunct CLEC Rhythms NetConnections to add DSL to its own Neighborhood bundle, Crane said in May, another claim that makes analysts scratch their heads.
“The Rhythms footprint was devastated,” said Phil Jacobson, founder of Network Conceptions. “Those assets are worthless.”
Some say MCI should sell one of its business units for sustenance, but Crane said he can’t see one that MCI would be better off without. Another way out of the coal mine, many have conjectured, is for MCI to be rescued through M&A by one of those “price-war mongers.” RBOCs might take particular interest in the way bankruptcy will reduce MCI’s debt from more than $40 billion to less than $5 billion. But such a merger would be inconsistent with the regional mindset RBOCs have displayed thus far, said Crane.
“The RBOCs would have to decide they want to be cross-regional and global. If they don’t want to be, I don’t see why AT&T or MCI would be advantageous to their strategies,” he said. “If they have an avowed interest in going beyond their geographies, the fastest way to do that would be mergers or combinations. But those are tough economics to make work when you look at the debt structures of a lot of players – except for us.”
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