IP provider makes its move

Global Crossing growth plan targets partners

Alan Rosenberg, Global Crossing's vice president of partnership development

Rick Steele

Alan Rosenberg believes Global Crossing Ltd. "couldn't be in a better place" in the U.S. federal market.

The telecommunications company is a subcontractor to AT&T Government Solutions Inc. on its bid for the $20 billion Networx contract. Global Crossing also holds its own contracts with the General Services Administration.

The Internet protocol company also is aligned with systems integrators, and is hosting conferences and hitting Capitol Hill to make sure government officials know about its services.

Rosenberg, Global Crossing's vice president of partnership development, and his U.S. federal team are focused on four areas to position Global Crossing for more government business, and ultimately to win more prime contracts. These include:

» Focusing on federal agencies

» Partnering with systems integrators that do business with those agencies

» Getting onto contract vehicles

» Building a presence in the government market.

"We've made a significant investment in the channel over the last six to eight months, and we're starting to see some of the benefits from that," said Rosenberg, who is responsible for the company's federal sector business and relationships with systems integrators worldwide. He has been in his position for 18 months, after replacing Ed Bursk, Global Crossing's former vice president of government sales. Bursk now is vice president of business development at Alcatel Government Solutions Inc. of Sterling, Va.

This investment includes targeting sales and marketing efforts on agencies with growing budgets, and adding engineering and customer support resources, Rosenberg said. He declined to specify the number of employees on Global Crossing's federal government team.

Back from the brink

Formed in 1997, the company imploded during the tech bust when it incurred billions in debt. It filed for bankruptcy in January 2002, but was later rescued when Singapore Technologies Telemedia PTE Ltd. bought a stake in it the following year.

At that time, the company did not seek U.S. business, because it feared it might not be able to meet contract obligations. But it slowly tiptoed into the federal market by working as a subcontractor on some government contracts.

In an interview with Washington Technology in January 2005, Bursk said the company expected the U.S. federal market to be a major part of its business.
The emphasis is starting to payoff. The Florham Park, N.J., company won its first contract with GSA, announced earlier this month, for $16.4 million to provide telecom services to federal agencies in the Southeast Sunbelt region.

Global Crossing will supply Internet protocol and legacy services to Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina and Tennessee. The company also is finalizing a Schedule 70 IT contract with GSA, Rosenberg said.
But the big bet is on GSA's Networx telecommunications and networks program, which will be awarded in 2007. Networx would be a key win for Global Crossing as a subcontractor to AT&T, because it will be the primary means for federal departments to purchase telecom services, Rosenberg said. Global Crossing is working with AT&T to refine the bid, he said.

A big challenge for Global Crossing is that the company "doesn't have the heft to go after Networx as a prime, so it has a limited number of platforms to work with," said Warren Suss, president of Suss Consulting Inc. of Jenkintown, Pa. "But with the right teaming relationships and the right pricing it can certainly build a significant federal practice."

Rosenberg's team is focusing on federal agencies such as the Defense and Energy departments and NASA, which require high bandwidth and are moving to IP-based networks. Global Crossing is in talks with the Defense Information Technology Contracting Organization, for instance, to see how the company can get more business, particularly in the area of network-centric operations.

The company also hopes to capitalize on agencies' switch to IPv6. Last year, Global Crossing deployed IPv6 across its global IP network.

At the Justice Department, Global Crossing has responded to a request for information for voice over IP services, and is exploring how to work with the Homeland Security Department as the agency consolidates various disparate networks, Rosenberg said.

Aim for the GWACs

In its pursuit of government work, Global Crossing will concentrate only on the federal sector and not the state and local governments, Rosenberg said. At the same time, it wants partnerships with large and small systems integrators to get access to their governmentwide acquisition contracts as subcontractors before moving on to prime work.

Global Crossing has targeted certain GWACs, although it hasn't announced names, Rosenberg said.

Since 2001, Global Crossing has worked with Northrop Grumman Corp. as a subcontractor on the global expansion of the Air Force's Distributed Mission Operations Network. The companies run secure, private, high-speed IP applications that ride on Global Crossing's fiber-optic backbone for the Air Force's flight simulation training.

The company also is talking to systems integrators about task order work for DHS' Eagle procurement, Rosenberg said. It also has teamed with large players on Defense Information Systems Agency's Encore II contract, he said.

"I've taken the tack that we will work as a subcontractor, because that's a more immediate way to source business and to team with the integrator community," Rosenberg said. "Then you pick places where you become the prime and work your way into prime relationships."

The carrier set its heart on the U.S. government market after it emerged from bankruptcy in late 2003. Global Crossing continues to be a major player in the United Kingdom's government market.

The company is slowly regaining its financial footing. At the end of May, it raised $384 million in two public offerings. A stock offering of 12 million common shares yielded $240 million, while a convertible senior notes offering brought in $144 million.

Global Crossing has pledged it will be begin generating positive adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) in June and positive cash flow at some point in the second half of the year. Earlier this month, investment bank Jefferies & Co. Inc. raised its fiscal 2006 revenue forecast for Global Crossing to $1.9 billion from $1.8 billion and bumped up the company's stock recommendation to hold from underperform.

"We've made significant progress. People understand who we are [and] the value equations we provide," said Rosenberg. "People have done business with us where they haven't done business with us in the past, and we're working with people who, in the past, never talked to us. In fact, we never talked to them, because we didn't have a plan."

Staff Writer Roseanne Gerin can be reached at regerin@postnewsweektech.com.

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