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Dynamic Telecom Industry Providing Great Opportunities for Those Adapting to Change.

I don't know what the future holds in the way of structure, products and services, but I do know that it is an exciting, dynamic industry, providing great opportunities.

The issues that are foremost in our minds today are the imminent divestiture of the Bell System and deregulation. Many of us are concerned about the effect of these decisions on our businesses. The anxiety and anticipation are justified, but when have we not faced serious concerns?

The journey we have been on its marked by three distinct phases. The first phase entailed making competition possible. It was a period in which we earned our legitimacy and gained a foothold in the marketplace. It was a life or death struggle, which we clearly survived.

The second phase is best described as a period of transition. It began a few years ago and is likely to take a few more years before it is complete. The transitional phase is where we find ourselves today. Its primary forces have been deregulation and the current strage that has been set for divestiture. This is the phase in which the issues have broadened, the players have changed their game plans and a larger audience took note of all stakes it had in the outcome.

The third phase still remains on the horizon, but what was only a glimpse a few years ago is looming larger and clearer every day. It is the period in which the future of telecommunications will unfold into a mature and highly interdependent "Age of Information." It is really no longer a matter of dream and speculation. We are moving rapidly toward the fruition of the real potential that a combination of technology, demand and free choice offers.

As we gaze into the future, I think the time has come for us in this industry to take greater control--and in some instances a new dimension of control--over our own destinies. That brings me back to the theme expressed by this convention. NATA has indeed been giving us the business for 14 years. I believe that NATA will continue to deliver the goods. But I also believe that we need to take a closer look at how we can better capitalize on those opportunities now--and for the future.

My list is short. It is only a beginning. Yet I am persuaded it is the right place to start. . . and I am even more convinced that the payouts can lift us to unparalleled levels of performance and profitability.

First, we must avoid ruinous price wars. Price cutting below costs is a short-term, short-sighted solution with disasterous consequences for the longer-term. Low-balling may get you the business today, but it offers little guarantee that you'll still be in business tomorrow.

In short, we must learn to walk away from unprofitable sales.

Second, we must emphasize service. Gone are the days when the customer is beguiled by new technology, new choice or price advantage alone. The service dimension weighs just as heavily in his decision--in some cases even more. The customer who knows that he can enjoy one-stop shopping with an interconnect vendor is likely to be a good customer for a long time.

Third, we must build on our installed base. We're not newcomers. We created this market. We've earned a reputation for innovation and satisfying customer needs. That's worth a great deal in add-on business among the installed base. The name of the game is not only to harvest new fields--but to cultivate more deeply the ones we already have.

Fourth, and finally, we in this industry must see ourselves as part of a larger world, not merely as an individual, admittedly explosive, segment of the telecommunications marketplace. We are selling into a much different environment. Deregulation and divestiture aside, the marketplace is no longer easily defined as mere circuits and telephones. Increasingly it includes interactive terminals, voice and data integration, networks and application-oriented total systems.

What this all means, I think, is that interconnect vendors must become better educated--or perhaps re-educated--to this new environment. In part, the need for this new knowledge and awareness stems from the changing market structure and landscape. Yet the flip-side, in which increasingly sophisticated users are also reading the signs of change, has to be taken into account.

Just as manufacturers are entering into joint ventures, so must we distributors find new allies, new partners and new ventures that will enhance our capabilities and, hence, our profits. We must look for those opportunities in the data world . . . in the carrier world . . . and in the network planning world, among others.

Surely, we must remain vigilant to the barriers,pitfalls and problems that will surely follow change. Many of the issues--cross-subsidization, predatory pricing and the like--will be familiar, although they might take on a slightly different cast and certainly will become increasingly localized. We must also recognize the new opportunities that change is bringing. If we read it right, we'll have access to new profit streams and wider access to old ones. I hope those prospects are as exciting to you as they are to me.
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Author:Hinkle, J.
Publication:Communications News
Article Type:transcript
Date:Jan 1, 1984
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