Sometimes you’re asking for trouble when you compare yourself or your company to others, but Mark Greenquist, president and CEO at Telcordia, used Amdocs’ latest performance metrics as his opening salvo to analysts last month to show that despite the economy, his company is fairing better than most.
In his first open address to the collective analyst community in two years, Greenquist credits financial maneuvers starting back in 2007 for putting the company on the solid footing necessary to weather the latest economic crisis. Those maneuvers included the refinancing of debt, rebalancing the pension plan and doing some corporate restructuring.
“Back in 2007, we really got focused on putting our house in order to get more stabilized. The first thing we did was take advantage of the financing environment back then and refinanced a large portion of our debt,” Greenquist said. “We have no maturities until 2012 or 2013 and no covenants to run afoul of, so we have secured our debt position.”
He said Telcordia is on track to have a reasonably good year, which will be down about 2 to 4 percent. “That’s significantly better than we are seeing from our competitors,” Greenquist said.
But financial stability wasn’t the only positive sign at Telcordia. The company decided to focus on three areas where it could grow revenue and succeeded to some degree. First were its legacy systems — the lifeblood of Telcordia. The company has acknowledged for years that revenue from its core legacy systems, deployed primarily at U.S. RBOCs, has been in decline. However, Greenquist said Telcordia has been successful extending the relevance of those systems and slowing their revenue decline by adapting them for next generation requirements.
“These core systems are extensible,” he said. “They are supporting a number of new carriers’ initiatives, especially around fiber and broadband.”
The second area of focus has been mobility where, for example, Telcordia has been able to extend its number portability expertise to international markets. However, Greenquist admits, “We have capabilities in mobility we need to take advantage of more effectively.”
The third area for revenue generation has been its international focus. Twenty percent of its revenue is now generated from outside the U.S.
Another feather in its cap is the turnaround of the Advanced Technologies group, which has become self-sustaining, grown its government business and its overall percentage of revenue to 12 percent.
Patrick Kelly, GTS research director at Analysys Mason, said Telcordia still dominates the U.S. market in service assurance and fulfillment by virtue of its strong position with the former RBOCs and has gotten new business from them as well as from companies such as Level 3 Communications. He added that Telcordia also has succeeded in diversifying out of its total dependence on U.S. incumbent operators with success in Latin America, India, Europe and new vertical markets such as automotive and governmental.
However, “Telcordia still has too much exposure to the U.S. market, which is the slowest growing global region. It lags in the fast-growing Asian and Middle East markets,” Kelly said. And despite progress with wireless operators, Telcordia gets too much of its business from the wireline segment.
