This is an interesting point. MCI, while it was in bankruptcy, lowered prices to keep customers. But now that things are better – can it keep customers and lower prices. It’s got to now balance between investors and customers.
USA Today is reporting that Dayne Sampson was stunned by the announcement, now almost two years ago, that his company’s telecommunications carrier had been accused of the biggest fraud in history. He depended on the phone giant to provide access to thousands of computers that are the virtual brains of his company’s core business, the Ask Jeeves search engine.
Sampson, vice president of information and technology for Ask Jeeves Inc., couldn’t afford a service disruption. “The first thing I did was call up the account representative and ask him what was going on,” Sampson recalled.
But its willingness to keep customers happy by slashing prices has had a huge and painful impact. This year the company is planning to report revenue of $21 billion to $22 billion — about $10 billion less than the $32 billion it reported for 2002, the year it filed for protection from its creditors.
Now that it is out of bankruptcy, MCI must begin to please its investors, not just its customers. Some customers, including Sampson, are worried. “Now that they have this bankruptcy behind them, I wonder if they will be as flexible,” Sampson said. (full story)