I am back from the FocalPoint annual conference. I will be back to a normal posting schedule and am glad to get back to business. It was great to see other Coaches and learn from them and their businesses.
Meanwhile, I need to talk about the second leg of Tellabs Access. That was the former Marconi business with BellSouth. When AFC bought that group, the plan in place was an upgrade to the FTTC product particularly in data and video. Shortly afterwards, this became a plan to move to IP Video over DSL.
This was a significant change and should have given us a head's up that something was going on. However, AFC was being bought by Tellabs and we were tied up with this. What happened was that SBC bought BellSouth and reformed what is now called AT&T. AFC had dealt with SBC purchases of both Pacific Bell and Ameritech. Both of these were bad for AFC, as SBC made only (what was at the time) SWBT approved product as approved. AFC had to restart the approvals process within SBC and until that happened any possible sales stopped.
The good news was that AFC became a Project Pronto vendor with SBC. How that happens nobody inside AFC knew. But we were the competition for remote DSL with Alcatel. We ended up with a small portion of the business amounting to $20M a year or so. We worked regularly to increase that and eventually ended up with a small ongoing business. Alcatel successfully fought us off in bulk but we kept the pressure on per our business plan.
The fMarconi group was a vendor in 2 product categories within BellSouth. They were deployed in Fiber To The Curb (FTTC) and Digital Loop Carrier (DLC) applications. The FTTC business was more important as this was a sole sourced contract. This deployment style was used in the high growth, high house density areas like Atlanta and Florida. There were lots of lines (over 1M) deployed and the BellSouth folks were proud of their joint deployment of FTTC.
The SBC folks in San Antonio had a different view. They had done some small FTTC deployments with a company called BBT. BBT did not survive and the technology was not picked up by anyone. SBC was very much against a sole sourced unique architecture like the BellSouth folks had deployed.
The important bit of all of this is that as the new boss came into control, you needed to evaluate what would happen with your partners. In this case, Tellabs decided that this was a low priority for SBC and they would let the BellSouth people keep doing what they were doing. This meant that the fMarconi Team in Dallas did little to nothing to market the FTTC product in San Antonio. Predictably this meant that FTTC was not selected as a mechanism going forward. SBC decided to pursue U-Verse with Alcatel/Microsoft/Cisco and new build would be based around that product mix.
Again, it was not an instant change but this meant that the business for the fMarconi group within SBC would decline dramatically over time. The second leg of the stool that was the $1B Access Group went away.
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