Globalcomm: Vendor execs ID trouble spots

Chicago--A group of equipment vendor executives at the Globalcomm trade show in Chicago Wednesday identified some of the key challenges and unknowns their businesses are facing today.

To Krish Prabhu, Tellabs’ CEO, the consolidation of major firms at both the equipment vendor and service provider levels raises new questions about the industry’s changing dynamics, harkening back to the days when a single carrier, nicknamed Ma Bell, was served by a single vendor, Western Electric.

“Now we see Ma Bell and Pa Bell,” Prabhu said. “A Western Electric and an Eastern Electric. The industry has not understood what this means for the supply chain and for procurement patterns. I would love to understand these trends and get more light on it.”

For George Riedel, Nortel Networks’ chief strategy officer, one of the unsung challenges vendors face looking forward is the lower average revenue per user (ARPU) inherent in the emerging markets, which will contribute much of the industry’s future growth. “The ability to develop businesses where the ARPU is a fraction of what it is today--$5 a month as opposed to $50--is going to be a challenge for us,” Riedel said.

Cindy Christy, president of Lucent Technologies’ network solutions group, pointed out that telecom companies face new rivalries from non-telecom companies that are now able to offer the same services.

“We need to take consumers with us and drive user adoption,” she said. “There are a lot of new entrants coming in that will want to deliver this experience to users. If not us, someone else will.”

Home networking is a major concern for Harald Braun, president of Siemens Communications’ networks division. With broadband feeding a variety of devices within the home, making those devices interoperate is a significant challenge, he said, and questions linger about whose role it is to handle technical support for those devices and the home network itself.

“Is it the service provider? Is it a new industry?” he asked. “We need to look into a home networking standard. What is it?”

Speaking more generally about the overall telecom industry, Braun called for the development of more global technology standards to better suit a market that is becoming increasingly borderless. “We still see some big countries doing their own standardization,” he said. “There are still standards bodies that are not willing to sit down at the table together and talk about global standards. The industry has to make a call for action here. When you speak Japanese to English people, it’s not going to take you far.”

Tellabs’ Prabhu also decried the confusion created by the debate in Congress over local video franchise processes. In an increasingly global market, he said, carriers and vendors should not waste their time “squabbling” about local regulations. “I’m not taking sides,” he said. “But someone needs to get that regulatory uncertainty off our plates.”

In the midday panel discussion, Prabhu also took a playful jab at the new Globalcomm trade show, which competes for the industry’s attention with the TelecomNext trade show. When moderator Matt Flanigan, president of the Telecommunications Industry Association--which sponsors Globalcomm--asked the panel to identify the sector’s challenges, Prabhu jokingly replied, “Conferences splitting up into more conferences.”