AGC seeks independence through channel

AGC seeks independence through channel

Despite growing uncertainty about the future of its parent company, network infrastructure provider Asia Global Crossing is looking to begin selling into the IT channel to continue to fund the development of its pan-Asian network.

Asia Global Crossing (AGC) was established as a joint venture between Microsoft (15 per cent), Softbank (15 per cent), private shareholders (12 per cent) and international networking provider Global Crossing (58 per cent). In January, Global Crossing filed for Chapter 11 bankruptcy in the US, volunteering to be placed under controlled financial restructuring.

Global Crossing has over $US20 billion of assets in undersea cables, city fibre links and data centres spread around the globe, but filed for Chapter 11 after finding it difficult to service debts of around $US12 billion. The directors are also the subject of an SEC investigation into the company's accounting practices.

Despite the large share Global Crossing holds in AGC, vice president and general manager of AGC Drew Kelton said the local company is a separate legal entity and the beleaguered parent has no access to AGC's cash or assets. As far as AGC's financial stability is concerned, Kelton said the company has adjusted its payments to its largest creditors -- the two companies building its expansive Asian network -- and is also seeking new capital injections from the investor community.

"Even without any further capital injection, we have restructured the company so that it can stand alone until at least 2003," Kelton said.

AGC's comprehensive pan-Asian network is 90 per cent complete, Kelton said, and is scheduled to be fully completed by the third quarter of this year.

Unlike its parent company, AGC has made some investments to ensure it can become a carrier solution company rather than providing just fibre capacity. As such, AGC is looking to sell into the local integrator/VAR market as well as the top-tier telcos, ISPs and ASPs.

Kelton said the company already has its capacity and network services sold through large integrators such as CSC, but the company is keen to move down the chain to integrators and VARs that sell into the small and medium-sized business market. Kelton said such a channel strategy will enable AGC to have a wide reach without having to invest in a distributed sales network.

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