Good as new

Somera Communications isn't so much telecom's thrift store — where threadbare '50s trousers find homes in teen wardrobes — as it is the dry cleaners of the industry, where used power equipment goes to freshen up, get that spot out and have a few sequins sewn back on before stepping back into circulation.

The company is in the business of rehabilitation — and not the Robert Downey Jr. variety. Somera reconditions de-installed power equipment, meaning it refurbishes used or defunct equipment to meet current manufacturer specifications. It then redeploys it in a customer's network, under warranty. Some touch-ups are cosmetic, but often the equipment requires re-engineering, such as customizing it to fit into the existing infrastructure. This may involve blending old and new products — or using multiple products from varying manufacturers.

In these days of bankruptcies and fire sales, Somera has its pick of rehab projects. “Never before has this process been more widely accepted than in today's market,” said Jeff Miller, executive vice president for Somera. “There is a greater abundance of excess equipment.” And service providers short on funds often find that de-installed equipment offers a better value than buying new.

This is certainly true for AT&T Wireless. This summer the company launched a power redeployment program and now is using Somera-engineered de-installed equipment to power its networks for a fraction of the cost of new equipment.

Because of subscriber growth, AT&T Wireless found its power plants were no longer sufficient. Somera stepped in to reconfigure them, testing equipment configurations that would produce the highest capacity power deployment and then engineering them into the location. Somera has been reconfiguring “30 to 50 power bays on a monthly basis,” Miller said.

With the service partnership, Somera is assured an ongoing role in the maintenance and rehabilitation of AT&T Wireless' power infrastructure. And a steady gig is good news in today's economy. Miller said the AT&T power program is a “personification of the growth of Somera,” which has seen its revenue increase of 8% this year.

Steve Levy, analyst for Lehman Bros., said power redeployments such as AT&T Wireless' offer “very meaningful cost savings” for companies willing to go with de-installed equipment. “We usually estimate a difference of about 35% to 40%.”

The problem is that not all carriers are crazy about the idea of using previously owned equipment in their networks, savings or not. “[Somera] does less than 5% of its business with Bell companies,” said Levy. “And a lot of CLECs believe they want the new equipment warranties.”