For a company with almost 9,000 employees worldwide and projected sales for this year of $1,230m, Milan, Italy-based telecommunications company Telettra SpA still suffers from a degree of anonymity that it says is wholly undeserved considering its history and achievements in this field; moreover, with the various developments taking place in the telecommunications industry, it is an anonymity that Telettra accepts could become increasingly disadvantageous. But there are a number of large barriers to overcome before Telettra can achieve the minimum level of awareness it feels that it needs both in Italy and abroad.
Overshadowing
One of the reasons that even the average Italian in the street has only the vaguest idea of what the company actually does, and why its main rival in the home market, Italtel SpA, is more famous, is undoubtedly the overshadowing effect experienced due to the size of Telettra’s parent company, Fiat SpA, which many Italians feel is in fact becoming too dominant in Italy, where 50% of Telettra’s sales are still made; the main reason, however, is the nature of the continually changing transmission technology that makes up Telettra’s business: as Terry Tyzack, manager of the Communication and Image Department points out, if you produce cigarettes, wine or tables (the conversation took place in a restaurant), people immediately know who you are, but he accepts that as a supplier of transmission technology, most of Telettra’s products and services often lack the tangibility required to enter the public imagination – a phenomen that also results from the fact that the fast pace of the industry means that at any one given time, 60% of Telettra’s products are less than three years old. Around 75% of Telettra’s sales are in the public network market, with products for transmission on physical lines, such as multiplexers and digital systems on optical fibres, and products for transmission on radio carriers, such as microwave radio link systems and public mobile radio – physical line and radio carrier product ranges both account for roughly a third of Telettra’s sales to the public network market; sales to private networks, which account for around a fifth of total turnover, are largely taken up with High Voltage and Medium Voltage power line carrier systems, train to ground communication systems, and a wide range of other transmission products; supervisory systems for various forms of networks, private branch exchanges and key telephone systems take up the rest of Telettra’s involvement in this area. When one looks at the kind of technology on which these products are based – Gallium Arsenide Field Effect Transistors, various optical components, high density circuits, mechanical and quartz filters, and things known as microwave cavity resonators – one appreciates the problem Telettra has in achieving the kind of profile enjoyed by the switch makers and network operators, such as British Telecommunications, that form a large part of its customer base.
– By Mark John –
And yet Tyzack argues that this low profile belies the extent of Telettra’s involvement on the international telecommunications scene. Through its Spanish subsidiary Telettra Espana, in which Telefonica de Espana has a 10% stake, Telettra has taken around a half of the Spanish transmission systems market, and has deals in the Soviet Union, Pakistan and Libya as well as a joint contract with L M Ericsson’s Intesa SA arm to build the digital cellular telephone system for the city of Barcelona; Telettra also supplies microwave systems to British Telecom, and optical fibre lines to Mercury Communications, and apart from its main bases in Italy and Spain, has another 20 odd offices scattered around the world; one of these, Telettra Mexico, has just won a $12m deal to install a rural telephone multi-access network in Mexico, so strengthening what seems to be a natural and potentially significant relationship with Latin American descendants in the growing South American telecommunications market. However, the increasingly international charact
er of the telecommunications industry, and the sharpening of competition that is expected to result from the creation of a single European market, means that firms such as Telettra can count less and less on an established markets, home or abroad: what is more, Telettra is, comparatively speaking, by no means a large organisation, and parent company Fiat, with its main interest being the volatile car industry, could not always be counted on to bail Telettra out if times were hard in its core motor business. Although not as exposed as switching companies will be, Telettra is without doubt aware of this potentially difficult future as it holds talks with the main six to eight companies in the field on the subject of a merger, or, as seems more likely, a joint venture including mutually beneficial marketing agreements with a large international company, possibly in the switching sector of the industry – the outcome of these talks, however, is unlikely to be known before the middle of next year.
1990 World Cup
In the meantime, Telettra is preparing an extensive international advertising campaign intended to achieve the desired level of awareness about the company before things start to hot up, with one possible emphasis being the guarantee of quality that Telettra feels it can offer – a campaign that, regardless of the quality of Telettra’s products, will seem more credible now that Fiat has managed to shake the image it had 10 years ago of producing rustboxes. And finally, in what seems like a heaven-sent opportunity to make a name for itself, particularly in its own country, Telettra is also taking advantage of the fact that Italy is hosting next year’s World Cup soccer finals by involving itself in a project to set up a number of high-definition television screens relaying live pictures of the matches to cities all over the country – and if that initiative can’t increase awareness about transmission technology among the football-crazy Italians, then probably nothing can.
