Telcordia Taps Its RBOC Links
With a stalwart legacy of selling network management software to the Regional Bell Operating Companies for their nationwide land-line networks, Telcordia Technologies Inc. is planning an onslaught into the RBOC-intensive wireless arena. For wireless users, the enhanced involvement by Telcordiaformerly Bell Communications Research Inc., or Bellcorecould mean improved service coordination but at a price that remains unknown.
In naming Matt Desch as CEO this month, Telcordia brought aboard a leader thoroughly versed in the dynamics of the wireless industry. Formerly the president of Nortel Networks Ltd.s wireless division, Desch at one time served on the boards of the two rival wireless trade associations, the Cellular Telecommunications Industry Association and the Personal Communications Industry Association. Within two years, Desch plans to double Telcordias wireless business, he told eWeek in a recent interview.
"Telcordia really only went after the wireless industry about two to three years ago," Desch said, adding that its main customersthe RBOCsdiscouraged it from moving into mobile network management. "Now, a lot of issues that the company has solved for wire-line providers are becoming issues for wireless providers. Service offerings are becoming quite diverse in the mobile environment, and managing those services is becoming very expensive and challenging."
Telcordias main products are built to help carriers reduce operating and capital costs by improving back-office processes. Often this is accomplished by eliminating manual steps and disparate systems and by automating business processes. For the mobile market, the Morristown, N.J., company plans to focus on resource management, service management and performance management.
Eighty to 90 percent of Telcordias revenues today come from incumbent operators, primarily the Bells, nearly all of that from land-line telecommunications. "My goal is to change those percentages by growing the non-wire-line side," Desch said. "I think the company could be a lot more valuable to wireless carriers and on the international front, too."
Shifting the companys revenue percentages from wire-line to wireless will not necessarily create a commensurate shift from entrenched carriers to competitors, however, as the lions share of the countrys wireless market is operated by RBOC affiliates or former RBOCs. Verizon Wireless Inc. is owned by Verizon Communications Inc. and Vodafone Group plc. Cingular Wireless Inc. was formed from the wireless operations of BellSouth Corp. and SBC Communications Inc.
Because the wireless industry in the United States is composed of a hodgepodge of diverse networks using divergent technologies, services coordination stands to benefit from a player of Telcordias stature providing network management software.
"Networks like Verizon and Cingular are conglomerations of many networks," said Ken Dulaney, an analyst at Gartner Inc., in San Jose, Calif. "Gluing those networks together to provide a uniform customer service platform for users could provide some advantages."
Because of its history, Telcordia enjoys a strong position supplying the RBOCs, which in todays climate of carrier consolidation have the strongest financial standings. The company was formed during the divestiture of AT&T Corp. in 1984 to provide technological expertise for the Bells. Even today, equipment vendors selling to the Bells must comply with Telcordias service integration testing process to ensure that their products are compatible with Telcordias operations support systems. In 1997, Science Applications International Corp. bought the company.
"I was really looking for a company that had a really strong market position with its customers and had the financial resources to survive," Desch said. "It was an attraction to me coming to Telcordia in that it is part of SAIC, which is 100 percent employee owned. Its timely that I joined a company like this."
While Telcordias legacy gives it entree with entrenched carriers, the company will have to prove its technological value again if it expects to achieve similar success in the wireless sector, Gartners Dulaney said. "Certainly there are synergies there," he said. "But there has been enough time between the spinoff of the Baby Bells that they would look at Telcordias products the way they would look at anyone elses."
In addition to expanding Telcordias wireless operations, Desch said he plans to work more closely with the computer industry to move the company away from its closed-system heritage. Last month, Telcordia joined with Microsoft Corp. to offer new hosted contact center services, a type of partnership Desch said he wants to replicate with other vendors. "Telcordia has a history of providing large end-to-end systems, and most of our interfaces were proprietary and closed," Desch said. "I am ... convinced that our systems need to be open and need to work with a variety of IT suppliers. There has been some internal reluctance about that at timesworries about our legacy platforms. But I believe the future has to be open, and you have to embrace it and move in that direction."
Part of the strategy of working more closely with the IT industry is to provide carriers with technologies to offer value-added services, particularly to the business market, as the profit margins of traditional voice services continue to decline. The hosted contact center service, which uses a Windows hosting platform, is touted as saving business users money because it does not require upfront hardware investments or ongoing maintenance costs.