WorldCom views large users, agencies as priority customers

Emerging today from bankruptcy, WorldCom Inc. formally shed its old name to become MCI Inc. and noted that large enterprise customers?including federal agencies?are crucial to its survival.

"There is no question that the government is highly important to us," MCI president and CEO Michael Capellas said. He said the company would work to increase its business with existing federal users, which include the Defense Department, Federal Aviation Administration and Postal Service.

Capellas claimed a high level of customer loyalty among enterprise-level customers. With the erosion of midtier customers and pricing pressure at the consumer level, enterprise users are an increasingly important base for the reorganized company.

The company emerges from Chapter 11 with most of its core assets intact, including its global networks. The name change reflects an effort to squelch the association with corporate fraud that the WorldCom name carried.

The former WorldCom filed for bankruptcy protection following the 2002 discovery of accounting fraud that masked massive losses. The Bankruptcy Court for the Southern District of New York in October approved the company's reorganization plan, which took effect today.

The General Services Administration temporarily barred WorldCom from seeking new federal contracts last year while it investigated the company's fitness to do business with the government. Suspension and debarment official Joseph A. Neurauter cleared the company in January, in exchange for three years of GSA oversight of its ethics and business practices.

MCI must make written reports every four months this year on its efforts to improve its ethics programs and business practices, and report twice a year beginning next year and continuing through 2006.

Capellas said MCI's government customers supported the company during the investigation.

"The customers were our strongest advocates in the process," he said.

Capellas said the company wants to cash in on the convergence of voice, data and multimedia, offering managed end-to-end services.

"You're also going to see us make a major move into security," he said. The demand for increased security is a common factor among the company's enterprise customers, he said.