XO Communications Company Brief (Archived Report)



XO Communications Company Brief (Archived Report)










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Archived Report
Company Brief
XO Communications

by Sherry Kercher

Copyright 2017, Faulkner Information Services. All
Rights Reserved.

Docid: 00017392

Publication Date: 1708

Report Type: VENDOR

Preview

XO Communications, based in Virginia, is one of the largest as well
as one of the few remaining facilities-based telecom carriers in the
United States. In 2011, XO was bought out by an investor group led by
activist shareholder Carl Icahn and taken private. The company’s strategy
focuses on increasing its sales to enterprises, wholesale carriers, and
government agencies through a rebranding marketing campaign, touting its
strong national broadband network and customer service. Verizon has
completed its $1.8 billion USD acquisition of XO Holdings Inc.’s
fiber-optic network business. This company brief provides an overview of
the XO and its recent activities.

Report Contents:

Fast Facts

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Name: XO Communications
Headquarters
13865 Sunrise Valley Drive
Herndon, VA 20171 USA
Phone: (703) 547-2000
Fax: (703) 547-2881
Web: http://www.xo.com/
Type of Vendor: National local exchange telecom carrier
Founded: 1996
Service Area: Nationwide US
Number of Employees: 3,000

History

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XO Communications began as NEXTLINK Communications, founded by Craig
McCaw in 1994. The company originally provided local
telecommunications services and, after the passage of the
Telecommunications Act of 1996, became one of the first CLECs to provide
facilities-based switched services. Like many telecom providers at
the time, NEXTLINK borrowed billions of dollars to build out its network,
and, again, like similar companies, never turned a profit. When
capital investments dried up during 2001, XO began to run short of
cash. By December, the company was unable to make interest
payments on its debt and was forced to file for bankruptcy protection on
June 17, 2002. But as the demand for broadband returned, so did
XO. In November 2005, XO Communications agreed to sell its wireline
business to financier Carl Icahn’s Elk Associates and keep its fixed
wireless business to eliminate debt. In 2006, Elk and XO mutually agreed
to terminate the sale and XO Holdings emerged to manage both its
wireline (XO Communications) and wireless (Nextlink) businesses.

The next two year were a rebuilding time for the company, which saw it
expanding its services and launching new offerings in the Seattle,
Washington, area while also opening up its XO National Hub, an entry point
through which wholesale network carriers could make use of its fiber
network. This period of expansion reached its peak in 2008 when XO signed
an agreement with Cisco Systems under which they would combine their
networking technology and IP communications network to offer “Cisco
Powered” services such as MPLS IP-VPN, Metro Ethernet, Security, Web
Hosting, and Dedicated Internet Access services.

Unfortunately, the next several years after this would once again prove
tumultuous for the company. Following a failed attempt by Icahn to once
again acquire XO in 2009, the company spent the better part of two years
in a constant state of flux. This only ended when XO finally relented to
Icahn’s continued advances and was acquired by ACF Industries Holding
Corp., an affiliate of Icahn’s. The company was then immediately taken
private while its CEO and president at the time, Carl Grivner, resigned
from the company. 

Today, XO Communications remains based in Virginia and is still one of
the largest (and few remaining) facilities-based telecom carriers in the
United States. The company’s strategy now rests on increasing its sales to
enterprises, wholesale carriers, and government agencies through a
rebranded marketing campaign, which touts its strong national broadband
network and customer service. To this end, the company has continued to
expand its holdings and offerings. One of its latest accomplishments was
the August 2012 announcement that it is the first service provider in the
United States to deploy 100 Gigabit per second optical technology across
its long haul fiber network on a nationwide basis. Since then, XO
Communications has set its sights on its first international expansions,
launching services in the Toronto area in October 2012, and expanding
those offerings to cover most of Canada in August of 2013. This does
not mean it has lost sight of the future in its home country, however. In
April 2014, XO Communications completed a $500 million round of financing
to fund a multi-year expansion of its nationwide network.

 XO Communications currently offers voice and data services to
businesses, government agencies, and other telecom carriers, and more than
fifty percent of Fortune 500 companies. In 2017, Verizon completed its
$1.8 billion USD purchase of XO Holdings Inc.’s fiber-optic network
business. Verizon expects to realize $1.5 billion USD in operating and
expense savings in net present value as a result of the transaction.
Verizon has also entered into an agreement to lease certain wireless spectrum
from former XO affiliate NextLink Wireless, with the option to buy
NextLink.

Key Executives

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  • CEO: Chris Ancell
  • Chief Operating Officer: Amador Lucero
  • Chief Information Officer, Senior Vice President:
    Noel Wong

Major Products and Services

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XO Communications offers products and services across the entire spectrum
of communication technologies. The categories on offer, as well as the
specific services are listed below.

  • VoIP (Voice over IP) – IP Flex, IP Flex with VPN, XO SIP, XO
    Enterprise SIP, Trunking, and Hosted PBX.

  • Voice – Local calling, long distance, conference calls, contact
    center services, and mass notification systems.

  • Network Services – MPLS IP-VPN, broadband Internet access, Ethernet,
    private networking lines, colocation services, fixed wireless access,
    and hosted security.

  • Hosted Services – Web hosting, cloud computing.

  • Carrier and Wholesales Services – VoIP origination, network
    transport, VPN, and carrier customer care.

Network Description

XO Communications continues to upgrade its US-wide network to
accommodate demands for capacity and speed. Network elements include:

  • IP Network. XO’s IP network includes a mesh of
    multiple 10 Gigabit circuits connecting XO network nodes, peering POPs
    and XO Data Centers. The XO IP backbone runs across its own intercity
    fiber facilities supported by terabit-capable core routing platforms and
    high-capacity peering interconnections. XO offers Dedicated Internet
    Access (DIA) and IP Transit. 
  • Peering Infrastructure. As one of the
    facilities-based backbone providers in the US, XO has private peering
    arrangements in many metropolitan areas at speeds of up to 10G bps. As a
    Tier 1 Internet provider, XO continually upgrades its peering
    infrastructure.
  • Connectivity from Internet Access POPs to the XO backbone.
    XO offers Dedicated Internet Access and Carrier Transit connections via
    40 Metro POPs in 85 markets. All DIA markets are connected to the
    closest XO IP Core Node; dual uplinks are provided from each Metro
    market into the closest intercity core node at speeds from OC-12c (622M
    bps) to 10 Gigabit Ethernet. 
  • Network Diagnostic Tools. Tools support analyzing
    connectivity, path, and route information in XO Data Network. 
  • Metro Fiber Connectivity. Metro Area Networks (MANs)
    allow XO to control customer traffic and ensure an efficient data
    transfer to the intercity network. XO metro-area networks are composed
    of 1.2 million metro fiber miles throughout 40 major US cities,
    including the largest 30 cities. MANs support high-speed Ethernet and
    SONET services.
  • Intercity Fiber Network. XO has deployed a nationwide
    terabit inter-city transport network, using Dense Wavelength Division
    Multiplexing (DWDM) routing technology, that spans 20,000 route miles
    across the continental US. 

Competitors

Recent Activity

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XO launched a Distributed Denial of Service Mitigation Service in
November, 2016 as part of its Security Services product portfolio. Then in
February, 2017, Verizon completed its $1.8 billion USD purchase of XO
Holdings Inc.’s fiber-optic network business. With this acquisition,
Verizon is looking to better serve its enterprise and wholesale customers.
It reports that it is expecting more than $1.5 billion USD in cost savings
as a result of the deal. The acquisition helped Verizon gain metro
networks in 40 major U.S. markets with over 4,000 on-net buildings and 1.2
million fiber miles. It is currently in the process of integrating XO’s
operations and facilities.

About the Author

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Sherry Kercher is an editor for Faulkner Information
Services. She holds a master’s degree in library and information science,
and tracks and writes about storage, communication networks and equipment,
and Internet technologies.

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