Team 3 Project 7

Mike Lindamood

John Pallotta

Jeff Plitt

Jennifer Yontz-Orlando

December 5, 2003

MCI:

“Rebuilding the Brand”

OverviewOverview

Global Ethernet Backbone Industry / Competition Strengths Stakeholder Management Recommended Business Strategy Implementation Plan

1 2 3

4 5 6

7 8 9

* 8 #

MCI’s Global Ethernet Backbone

SkyTelDivision

Consumer Services

Internet Connectivity(Dial-Up, WiFi Hot

Spots, T1)

wan

Internet Services:Web-hosting,

networking, WAN/LAN

Corporate Services

VoIP

1 2 3

4 5 6

7 8 9

* 8 #

Future VoIP& Wirelesstelephone

services/G3 Outside Broadband

Cable Network

TelephoneNetwork/DSL

ProductReach

Communication Solutions

Industry TrendsIndustry Trends

Bundling of Telecom Services– Local , LD, Caller ID, Voice Mail, E-mail

Internet Calling (VoIP & Telephony)

Broadband (Fiber Optic Technology)– DSL, High Speed Data Transmission

Wireless (Wi-Fi) Technology– Wi-Fi Hot Spots, Text messaging, etc.

International Growth

Emerging TechnologyEmerging Technology

VoIP – Web Conferencing– Cost Savings– $20B Annual Growth Industry

Barriers between IT and Telecom Blurring

Domestic Competition within Industry Domestic Competition within Industry MCI AT&T Sprint Verizon SBC BellSouth

VoIP X X X X X X

Broadband X X X X

Mobile X X X X X

LongDistance

X

X X X X X

R&D X X

MarketShare

X

Network X

GlobalPresence

X X

Cash X X

Top Ten Ranked by SalesTop Ten Ranked by Sales

1. Nippon Telegraph and Telephone Corporation (NTT)2. Verizon Communications Inc. (VZ)3. Deutsche Telekom AG (DT)4. France Telecom SA (FTE)5. SBC Communications Inc. (SBC)6. AT&T Corp. (T)7. MCI Corp. 8. Telecom Italia S.p.A. (TI)9. Telefónica, S.A. (TEF)10. BT Group plc (BTY)

Domestic LD ServiceDomestic LD Service

1. AT&T

2. MCI

3. Verizon

4. Sprint FON Group

5. Quest Communications

Mobile ServicesMobile Services

1. NTT DoCoMo, Inc. (DCM)2. Vodafone Group PLC (VOD) - Verizon3. Cellco Partnership - Verizon4. Cingular Wireless LLC5. Orange SA6. AT&T Wireless Services, Inc. (AWE)7. T-Mobile International AG8. China Mobile (Hong Kong) Limited (CHL)9. Telecom Italia Mobile SpA10. Telefónica Móviles, S.A. (TEM)

Risks for MCIRisks for MCIDecrease of Local and LD ratesGovt. Regulation of Internet Calling ProcessSmall Companies Entering Market and

Diluting Customer BaseMCI’s Limited Wireless PresenceCable Offering VoIP Via Cable NetworksFederal Court Mandates to Share NetworksCompetitive Rivalry Between Existing

Players: Legal action by AT &T and Verizon

Strengths of MCIStrengths of MCI

1. UUNET– Largest Global IP Portal – 50% of Global On-line Traffic

2. Loyal Customer Base

3. Government Business ($1B per year)

StakeholdersStakeholders

New InvestorsWall Street and MediaCustomers

– Consumers– Business & Government

EmployeesLenders

Business StrategyBusiness Strategy

Core Competency: UUNET / BackboneLocal / LD Cost Reduction (# 2)Utilization of Cash Reserves

– IP technologyConvergent Technology

– AlliancesGovernment Business

Implementation PlanImplementation Plan

ManagementStrategic FlexibilityOrganizational StructureEthical and Governance

ManagementManagement

Continuous Mission Statement“Flat” Communications Role Model for ValuesCross-functional Groups

Strategic FlexibilityStrategic Flexibility

Proactive strategic flexibility will be established throughout the MCI

organizational structure.

Management

Information Systems& Engineering

Quality Assurance

Research & Development

Marketing

Sales

CONSUMER

GOVERNMENT

WHOLESALE

Optimal Organizational Structure

Code of Ethics

Good Corporate Governance

Ob

liga

tion

sR

esp

on

sib

ility

Ethics and GovernanceEthics and Governance

Breeden Report– Continued compliance and implementation– Internal ethics training– Zero tolerance for non-compliance

All Operations within Code of EthicsInternal and External Communications will

use “Sharing the Commitment to Integrity”

Additional ImplementationAdditional Implementation

Knowledge Mgt.– Ability to share internal knowledge– Employee participation in decision making– Establish incentive programs

Organizational Learning– Continuous process of growth– Feedback from participants– Able to overcome previous attitudes and behaviors

Conclusion / SummaryConclusion / Summary

Rebuilding the BrandEthernet BackboneOrganizational StructureEthical Operations - Globally