A Publication of WTVP

If there is one thing that is inevitable it is CHANGE. And change is exactly what consumers face with regard to both telephone services and telephone equipment.

Telephone Services

I have had more than a few customers over the years comment that things were much simpler when Ma Bell was in place. I have come to the conclusion that it is not just that Ma Bell was in place, but that communication demands were vastly different during the height of its reign. Looking back to 1905, only eight percent of homes had a telephone, and a three-minute call from Denver to New York City cost $11. In the 1970s, very few businesses—and certainly no residential customers—were demanding high-speed data services. (We did not even have a TV with a remote!) Video was reserved mostly for government applications, and there was no such thing as VoIP.

A single company would have a hard time keeping up with the consumer demands of today. But if we follow the landscape change, we may notice that we appear to be headed back to a “Ma Bell” type of system. Mergers and acquisitions of carriers have been a way of business in the past 18 months. In our region, SBC acquired AT&T, retaining the globally well-known name of AT&T; next to be added to their fold was Bell South and Cingular Wireless. Verizon and MCI are similar stories. This has been both beneficial and challenging for the average consumer.

These events provided benefits to the consumer such as bundled packages, cheaper ADSL service and joint infrastructure for wireless. Bundled packages for commercial customers include flat-rate pricing, which encompasses both line access costs and unlimited local calling. It seems wonderful and simple, but customers should beware. If a business has a minimal amount of local calling on specific phone lines, these bundled line prices may actually cost more in the long run than when the minutes logged on these lines are billed at a per-call or per-minute rate. There are advantages to piecing together the types of packages on an account—some lines can use the bundle while others are priced with usage. This may be more advantageous in the long run.

But AT&T and Verizon must take heed to not only maintain but enhance their customer service skills, as there is more competition among product lines than when Ma Bell was the only game in town. It is documented that the number of cable telephone subscribers rose by 40 percent last year, and that does not account for the number of consumers choosing alternate suppliers, such as Vonage on a national level, or VoiceSpring, Light Edge or OmniLec at the local level.

Equipment Options

In the commercial marketplace, you have many decisions to make. Should you stay with a traditional digital phone system or incorporate IP technology? Do you purchase this technology from the traditional telephone companies or will you look to your data networking provider? If you choose to purchase an IP telephone system, should you take advantage of advanced applications such as integration with data systems to utilize combined resources such as unified messaging, instant messaging, real-time collaboration through video and web conferencing, speech recognition, presence and mobility? Some of these applications were available through digital technology but are enhanced through the proliferation of IP telephony. Again, as the consumer, you should know that many manufacturers offer solutions that integrate your existing investments and incorporate new applications through add-on servers, processor replacements or circuit card inserts. These items can be phased in rather than all equipment being replaced at once.

Mergers and acquisitions are not just reserved for carriers. Marriages between Siemens and Nokia, Alcatel and Lucent and Spectralink and Polycom, in addition to other manufacturers initiating talks or letters of intent, such as Mitel and Inter-Tel, appear to be just the tip of the iceberg of change in the equipment sector. Then there is Avaya, one of the largest tier-one equipment providers, which was recently purchased by two private equity firms. Industry insiders speculate that this could be a good thing for Avaya, giving them an opportunity to regroup without being publicly scrutinized or held accountable by public investors. The fact remains that Avaya has a very large install base and was attractive enough to entice Nortel’s interest down to the wire of the purchase. In any case, if you are an Avaya customer and have initiated a maintenance contract on your equipment, it would be wise to perform due diligence and review the terms to make sure you are aware of your options of automatic renewals, notice of terminations, etc.

All of these changes within the indurstry happen for a reason. Some companies may simply want to increase their customer base by merging with or acquiring a company that has similar products. Another reason may be to enhance their product lines to complement existing offerings to their client base. Cisco is probably the most public in its quest for technology enhancements to its products. If its product line needs something new or is constantly connecting with another technology, they simply acquire the company that has the technology they want.

Sometimes these mergers and acquisitions backfire. The acquired customer base may not produce the expected results. Productivity can be compromised by supporting too many similar products under one roof. Perhaps research and development is not fostered because the technology acquired in the merger was “acceptable.” My hope is that the recent changes in the telecommunications landscape will really benefit the consumer and not just make things more convoluted. Time will tell. The one sure thing we can count on is that CHANGE will happen. And that kind of change makes it fun to be a part of. IBI