Hoping to meet the international networking needs of businesses in the United States and Japan, NTT Communications Corp., the telecom arm of Nippon Telephone & Telegraph, and Web-hosting power Verio Inc. have sketched out plans for new services once their $5.5 billion merger closes later this month.
By connecting their respective international IP backbone networks, along with one being built by Verio in Europe for use later this year, the duo will be able to provide services with far greater geographic reach. Verio will operate as a subsidiary, with a combined management team and its original CEO.
Plans call for a global IP virtual private network offering, a content-caching service, and a service that lets users install mirrored Web sites around the world, Verio CEO Justin Jaschke says. "This deal is all about the future of global E-business becoming brighter than ever." These services will be offered beyond the IP hosting services both companies now provide.
But for now, the duo will sell a package of IP services---including hosting--to businesses of all sizes, says Masanobu Suzuki, CEO of NTT Communications. His company took an equity stake in Verio when it went public in 1998, and the two have been working together since then, he says. A combined worldwide group of 7,000 resellers will help market the duo's services. Suzuki wouldn't say how much his company will invest in Verio to grow the company and build on its current resources.
"This merger will create a powerful international IP services company with the assets, deep pockets, and geographic reach needed for companies seeking to globalize their E-business efforts or just extend their corporate networks internationally," says Daniel Briere, founder of telecom consulting firm TeleChoice.
The merger has been cleared by U.S. regulators and others who feared that letting NTT buy Verio would have negative national-security implications because the Japanese government owns 55% of NTT.