A look in the mirror: Industry study ranks companies' good and bad sides

The value of a telecommunications company is more than its annual revenues. A recent study illustrated that other areas, such as employee relations and customer loyalty, will become more important as competition increases.

Creamer Dickson Basford, a research and consulting firm based in New York, has compiled the Hidden Value Index. The index, completed in July, ranks 37 telecommunications companies, including vendors, and wireline and wireless carriers.

More than 200 financial analysts who follow the industry were asked to name the companies they followed most closely and rank them in eight areas: concern for and relations with its employees, ability to reduce company costs, ability to avoid regulatory problems, ability to increase revenues, customer satisfaction and loyalty, brand equity of the company and its products, ability to increase productivity, and research and development.

Some in the industry have complained that the index compares carriers with vendors, said Larry Chiagouris, head of CDB. But it also targets a mixed audience. The general public and employees at those companies ranked are two examples.

"If you are an investor, you don't care if it's a reseller, a phone company or a chip maker: You just want to know which companies in the telecom industry are better bets than others,' he said.

CDB did the first Hidden Value Index in the spring of 1995. The firm is independent, which means that no one commissioned the study, said Chiagouris.

A closer look at the 15 ranked wireline carriers shows several similarities. For example, GTE's highest score was in the area of brand equity of the company and its products--more commonly known as market name recognition--as were the highest scores of MCI, SBC, Sprint and AT&T.

"We're happy with our ranking, but [carriers] all score high in that area because we spend a lot of money to make sure our name is recognized,' said George Lieb, vice president of investor relations for GTE. "GTE has more of a national reach in that area than some of the other carriers.'

Ameritech, which got its highest score for its relations with employees, disputed its place on the index.

"According to Wall Street analysts, we have more buy recommendations than any other [Bell company] or GTE,' said a spokesman.

Most of the carriers ranked well in their ability to increase productivity. Southern New England Telecommunications and BellSouth scored highest in customer satisfaction. The majority of carriers ranked lowest in their ability to avoid regulatory problems.

"We have to deal with the [Bell companies] on opening up their operations support systems and non-recurring charges, which the [Bell companies] have used to put obstacles in the way of opening up the local monopolies,' said an MCI spokesman. "And access fees are still a large concern.'

The index is meant to give direction, not derision, said Chiagouris.

"For the ones that are happy with their scores, it's an indication they are doing a lot of things right,' he said. "For those that didn't do well, it's an opportunity to know what challenges are still ahead. You can elect to see it as nonsense or more information. Either way, don't shoot the messenger.'

GTE EXPANDS FOR WHOLESALE BUSINESS

GTE has opened a second National Open Market Center. The new center, in Fort Wayne, Ind., is needed to accommodate GTE's wholesale business expansion with CLECs for local interconnection service. The first center was opened in Durham, N.C., in January 1996.

DOING IT ALL ON-LINE

Andersen Consulting's Communications Industry Group has teamed with NBTel to launch the Interactive Phone Store, where NBTel customers learn about new products and services, add or remove calling features, see account activity and pay phone bills. The store address is www.nbtel.nb.ca.