Explosive growth abounds the telecommunications industry

Black Collegian, Apr 2001 by Huddleston, Monica M

Here is a partial listing of telecommunications companies, by category:

Local Exchange Carriers (LEC): Verizon, SBC Communications, Inc., Bell South, and US West. At one time there were seven regional Bell operating companies (RBOCs), prior to the Department of Justiceordered breakup of the old Bell system.

Inter-exchange Carriers (IXC): AT&T, Sprint, Worldcom (formerly MCI Worldcom), Williams Communications. These companies provide the long distance calling networks, selling wholesale and retail minutes of use to residential and business customers. It is important to note that LECs and IXCs are rapidly becoming each other. Regulatory approval from the FCC has already allowed two LECs to become long distance service providers (SBC in a few states, and Verizon in New York). It is just a matter of time until LECs and IXCs will be in each other's business full force.

Competitive Local Exchange Carriers (CLEC): Covad Communications, Nextel, NorthPoint Communications, Qwest Communications, Nextlink Communications, Inc., Broadspan Communications. These are just a few of the hundreds of companies that rose to significantly compete with incumbent LECs after the Telecommunications Act of 1996. CLECs typically concentrate on luring away the LECs' large business customers.

Wireless: Sprint PCS, Cingular (Southwestern Bell & BellSouth wireless merger), Verizon, AT&T, Alltel, Nextel. Most of the major LECs and traditionally Interexchange carriers (IXC) have a wireless subsidiary.

Hardware Manufacturers: Lucent, Nortel Networks, Siemens, NEC, Cisco, Fujitsu, Ericsson, Nokia, Motorola, Alcatel, Tellabs, 3COM, Texas Instruments, Coming Cable Systems (formally Siecor), Ciena. These and many other companies make the switching, transport, networking and multiplex equipment used by telecommunications companies in the delivery of their products and services.

Software Manufacturers: MicroSystems, Inc. are but a few. Several of the hardware manufacturers also do software application development, production and sales.

Internet Service Providers (ISP): America Online (AOL), Prodigy, UUNET, Alta Vista, and the many LECs and IXCs also have Internet companies offering the service. There are over 5,000 ISPs in the United States.

Cable TV and modem providers: AT&T Cable Services (formerly TCI), Charter Communications, Time Warner, Cox, MediaOne, and several others.

A discussion on telecommunications, or any other business discussion in the world today, would not be complete without mention of the merger-mania that continues to dominate the news. In the world of business, the name of the game is retaining market share at a minimum, and growing it steadily, rising to exponentially at best. One of the most common ways to accomplish this business imperative is for those who are experts in their strong suits, but not as experienced or endowed in other areas, to acquire, merge or otherwise strategically partner with another entity.

Hardware manufacturer Nortel Networks has executed 12 acquisitions in as many months. The latest purchase is of Sonoma Systems, an integrated access device vendor. This purchase is expected to strengthen Nortel's market positioning in hardware sales. Bell Atlantic and GTE sealed their merger deal following FCC approval in 2000. Their marriage, intended to expand their scope and footprint nationwide, makes Verizon (new name of merged companies) the largest U.S. telecommunications company. SBC Communications, responding to its need to expand its wireless footprint in the U.S., acquired BellSouth's wireless entity in 2000. Other mergers include Qwest and US West, AOL and Time Warner, Verizon with DSL provider NorthPoint Communications to form a new broadband company that will carry the NorthPoint name, and Southwestern Bell Internet Services with Prodigy, Sterling E-commerce, and a few others in which they have purchased some equity.