WorldCom: Asian customers haven't jumped ship
Despite its massive financial troubles, the telecommunications giant says retaining customers isn't an issue with its corporate clients in Asia.
In late July, the telecommunications giant filed for Chapter 11 bankruptcy protection after allegations that the company had improperly accounted for almost $4 billion on its corporate balance sheets during the past five quarters. Early this month, the company revealed an additional $3.3 billion in earnings that were improperly recorded on its books.
But "it's business as usual for us in Asia," said Mark Russell, WorldCom South Asia managing director.
Russell said WorldCom's Asian customers have not abandoned the company. "Across the region, we have not seen an increase in customer churn rate. In addition, we have not seen any large multinational firms leaving us due to our situation," he said.
"This is because we have been busy communicating to customers that the filing for Chapter 11 (in the United States) does not affect our Asian operations and our abilities to provide services."
According to Russell, WorldCom has 22,000 clients in the region. They include banker ABN AMRO and analytical instruments maker Perkin Elmer in Singapore; shipper Wan Hai Line and computer maker Benq in Taiwan; and Korea Electric Power and systems integrator Hyundai Information Technology in Korea.
When contacted, ABN AMRO spokesman Jochem van de Laarschot confirmed that the bank had no immediate intention of switching service providers.
"Under the current circumstances, we will keep a close eye on the developments at WorldCom until the contract expires at the end of the year," Amsterdam-based van de Laarschot said. "We will evaluate the contract and the services and decide about the future of our relationship then and reevaluate our position before that if circumstances change."
In Singapore, for example, WorldCom exceeded its revenue and order entry targets in June and July, said David Rich, WorldCom's general manager for Singapore.
"These are targets set during the fourth quarter of last year, and we haven't adjusted them following the bankruptcy filings," said Rich, who declined to reveal actual sales.
WorldCom has 2,000 employees in the Asia-Pacific region.
The Clinton, Miss.-based carrier work in numerous areas in the region, including Hong Kong, Japan, Australia, Singapore, Malaysia, Korea, Taiwan and India, where it provides high-speed data, Internet Protocal and voice services. It has also established data networks in cities in Australia, Japan and Singapore.
Despite its financial woes, the long-distance carrier expects more than 10 percent revenue growth in the Asia-Pacific region this year, Russell said.