Despite the setbacks suffered by British Telecommunications Plc’s Syncordia Corp venture, the telecommunications facilities management market has an almost hypnotic attraction for vendors. The number of potential customers may be small, but the customer base is significant. Work done by Touche Ross Management Consultants suggests that the global market stands at only 1,500 to 3,000 multinational corporations, but they account for between 50% and 60% of all spending on international telecommunications systems. But cornering the market is far from easy. In particular, Touche Ross’s work suggests that public carriers have an image problem, and distrust among the users is endemic. The report is peppered with user quotes along the lines of …the carriers seem to have their hands full just managing transmission without adding maintenance to their responsibilities. It seems that the target users are going to need a lot of persuasion before they entrust their substantial in-house networks to a public telephone operator. There are very few ways for the carriers to gain competitive advantage, says Robert Woodward, partner with Touche Ross, but single billing is a big one.
One bill
Superficially, providing one bill for multinational customers looks like one of the easier tasks for potential global facilities managers: no regulatory hurdles or insurmountable technical barriers here. However, Woodward has yet to see it handled successfully and says that the first operation to crack the problem will reap an enormous advantage over its competitors. This is part of Touche Ross’s belief that the market is now ripe for global networking and that xenophobic user tendencies about who they should purchase network services from will be swept away once the benefits of outsourcing are demonstrated. The trouble is that they haven’t been practically demonstrated as yet. At the moment users get the worst of both worlds says Woodward, commenting on the way that potential customers turn to facilities managers for particular tricky networking problems such as a spur to the Philippines or South America, only to find that the bits on offer are the easy bits. Meantime the Swedo-Dutch Unisource NV joint venture between Televerket and Koninklijke PTT Nederland NV is showing a clean pair of heels to the offshoots of its weightier rivals, agreeing to a network merger with Sprint Corp so that Unisource can achieve global coverage by 1993. Sprint is not investing any money – a fact which surprised some analysts who were expecting a closer degree of co-operation. However, Unisource will buy TP 4900 packet switches from Sprint International – the part of it which used to be called Telenet and which remains a strong player in the X25 equipment market. After starting up in Sweden, Germany, the UK and the Netherlands from September, Unisource will add Belgium, France, Norway, Denmark and Finland by the end of the year. It is also negotiating with Kokusai Denshin Denwa Co of Japan to joint the party. The Dutch and Swedish partners reckon that they have the edge over Syncordia and over the Deutsche Bundespost Telekom-France Telecom Eunetcom operation, due to begin operating this September simply because they are relatively small – and therefore less intimidating to potential customers.
