About four years ago, when he was selling the idea of Ameritech’s takeover by SBC Communications Inc., Richard Notebaert said the deal would promote competition.
A beefed-up SBC would charge into 30 markets outside its home territory, causing the dominant carriers based in New York, Atlanta and Denver to come stomping into Chicago in retaliation, Notebaert predicted.
That didn’t happen.
SBC quietly backed away from its strategy and the folks at Verizon Communications, BellSouth and Qwest Communications have made only slow, measured moves into Chicago’s market.
Now that Notebaert has taken the reins at Qwest, can we expect the company to come charging in here? Probably not soon, but Notebaert dismisses any suggestion that Chicago’s local phone market isn’t highly competitive.
“Competition is happening on a larger scale than anything anyone ever thought of,” he said. “There’s huge competition.”
Wireless carriers have been winning voice customers away from traditional carriers like SBC, Notebaert said.
“At the time we did the deal, SBC was committed to go into a lot of geographic areas and create competition,” Notebaert said last week from Naperville, where he was cleaning out his desk as chief executive of Tellabs Inc. “I think that technology and competition overtook that plan.
“Now there is a significant loss of voice business for SBC in Chicago. They’re losing lines and message units are going down.”
Notebaert said that last year when he and his wife rented a place in Naperville to live closer to Tellabs, they never bothered to have a phone line installed. They relied upon wireless phones.
He said that big Bell carriers will eventually compete with each other for high-end customers who buy advanced services, but stressed that competition needn’t be limited to the wired world.
As for Qwest, the financially troubled firm is looking more at retrenching, not expanding into new markets. Qwest is already re-evaluating much activity outside its 14-state home region in the Western United States and may exit some of those markets, especially those in foreign countries, Notebaert said.
“The re-evaluation started yesterday and should be done within weeks,” Notebaert said. “We cannot be everything to everybody. We have to be targeted.”
Voice conferencing bullish: September’s terror attacks spawned a teleconferencing surge that is continuing, a new industry survey finds.
Voice teleconferencing, which is now a $2 billion a year business globally, has been growing in North America by about 40 percent annually for the past five years. A survey by TeleSpan Publishing Corp. finds that last year the growth rate jumped to 46 percent, with most of the extra growth coming after Sept. 11.
For this year, the growth appears on track to come in at 45 to 50 percent, said Elliot Gold, TeleSpan president.
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“This is a significant increase in teleconferencing that appears directly related to the events of Sept. 11,” Gold said.
In the past, events such as the gulf war have also boosted conference calling over business trips, but the effects have generally been short-lived. Gold said the continuing effects of Sept. 11 may be related to the horrific televised images of the World Trade Center towers collapsing.
“My theory is that these images personalized this event for people much more than anything related to the gulf war,” he said.
The survey also noted that last year customers handled 87 percent of all voice conference calls themselves–that is, without an operator’s assistance–up from 67 percent in the previous year.
At InterCall, a Chicago-based conference call operator, there was a big increase in business right after Sept. 11, said Scott Etzler, chief executive. That was caused in large part by travel restrictions and closed airports.
While business has slowed somewhat since the few months after the incident, it is still up, Etzler said, likely because people who used the new technologies liked them.
TeleSpan’s survey doesn’t include three-way calls that are made using a service readily available from local phone companies. Gold said that he used to monitor those calls, but that industry consolidation and other changes have made that data less accessible.
Three-way calling is a significant factor in telecom.
“In 1994, revenues that the Bells received from three-way calling totaled $294 million,” Gold said. “In that same year the total revenues from business conference calling was only $254 million.”
Speedy computing: Computer researchers at Indiana and Purdue Universities have linked two supercomputers from IBM Corp. with a high-speed optical network so that the two machines work together as one, performing more than a trillion operations a second.
Called the Indiana Virtual Machine Room, the networked supercomputers are breaking new ground in calculation speeds by breaking down complex programs into smaller segments that can be spread across the many processors in each of the supercomputers.
“What we’ve done here is a proof of concept for a system that pools computer resources,” said James Bottum, Purdue’s vice president for information technology. “We’re pushing the computational frontiers, creating a computational grid that spans geographic boundaries.”