|
|
Sid Taylor has been in telecommunications for the last 26 years and packs a world
class experience in his chosen field from around the world. After the merger of
Alcatel-Lucent, he was sent to Pakistan to look after Alcatel-Lucent business in
Pakistan & Afghanistan. Among his various telecom ambitions as a professional, one
is to export trained human resource from this country. Already, about 20 Alcatel-Lucent
engineers of Pakistan origin are working in other countries of the region. Sid Taylor,
Country Senior Officer for Pakistan and Afghanistan and CEO Alcatel Pakistan, speaks
to TelecomPlus
|
|
|
|
TelecomPlus: How did you get in to telecom?
Sid Taylor: I started in this field in 1971 as a 2nd lieutenant in the US Air Force. For 26 years I
traveled the world serving in numerous telecommunications assignments ranging from joint
Australian-US Satellite Station and NATO Command & Control (Turkey) positions to combat C4I
in Saudi Arabia and world-wide Engineering & Installation with two tours to the Pentagon. I
retired as a Colonel from Pentagon as Director of Plans, Programs, and Resources in the
Command, Control, Communications and Computers organization and joined Lucent
Technologies in 1996 as the Marketing & Sales Director based in Riyadh, Saudi Arabia. During
the next 7 years I held several key positions in project implementation, strategy, and business
development as our region expanded to cover the Middle East and Africa. Our headquarters
transferred to Abu Dhabi in 2003 where I held several different Sales and Business
Development positions. When the Alcatel-Lucent merger took place on Dec1, I was fortunate to
get the opportunity to come to Islamabad to take over as the Country Senior Officer for
Pakistan and Afghanistan as well as the CEO of our local Alcatel Pakistan Ltd organization
headquartered here in Islamabad.
How different do you find it in civilian life?
During my 26 years in the military, I was fortunate to see and actually be part of the many
changes and advances in the rapid evolution of telecom technology. I also saw some of the
most advanced telecom systems most people do not get a chance to see. However, throughout
my military career, I worked with dozens of contractors and equipment vendors to ensure we
leveraged these technological advances. When I moved to the civilian side, most of the
products remained the same, just different applications. Also, the products did not need to be
ruggedized or built to combat specs. One common aspect is that in either case you seem to be
constantly involved in selling--whether it be to Congress to obtain budget approvals or to
telecom operators offering Alcatel-Lucent solutions.
What prompted the Alcatel-Lucent merger?
A chain of events set the merger in motion starting in January 2000 when the IT bubble burst.
The Y2K anomaly pumped billions of dollars into the IT market encouraging many companies to
join in the race. For a while, most were successful and start-up companies enjoyed huge initial
success. The volume of Y2K work was incredible and unprecedented which enabled many
companies to obtain loans from venture capitalists simply by saying “IP.” Y2K came and went,
but when it did, it was almost like someone turned off the light switch. It wasn’t long before
people in the industry realized that the Y2K infusion of funds was truly just an anomaly.
Unfortunately for Lucent and other vendors, we invested billions of dollars in many telecom
operators, some just starting out. Soon after the IT bubble burst, many companies, especially
recent startups vanished leaving billions of dollars of debt on the books of companies like
Lucent. The company was forced to change its marketing strategy and took actions to reduce
costs and headcount via outsourcing our manufacturing and selling off portions of our
company. Some examples are Avaya for Enterprise and customer premise equipment; Agere
with its microelectronics gear; and our power products. Over the years, Lucent’s workforce
downsized from 129,000 to 32,000 employees at the time of the 1 Dec 2007 merger. A huge
reduction. Much lower than expected spending from our carriers meant less revenue which also
forced us to rationalize our portfolio concentrating on the solutions in which the world’s major
telecom operators were willing to invest.
In hindsight some of the portfolio and R&D decisions we made turned out to be bad decisions.
One example is Lucent’s decision to cancel its GSM efforts to concentrate resources on 3G.
The gamble seemed logical at the time but then licenses became too expensive and European
carriers delayed investments. Most continued to spend up to 80% of their limited Capex on
GSM technology, especially in the emerging markets. This entire amount was no longer in our
addressable market. This fact plus the lower investments being made by our North American
clients, made it extremely difficult for Lucent to grow revenues. We became profitable but at
much lower top-line numbers and were only able to attain quarterly single-digit growth. Lucent
and Alcatel actually entered discussions on a possible merger more than four years go but for
numerous reasons the initiative stalled. However, circumstances continued to change as both
companies achieved profitability and were on the road to solid recovery. Discussions started
again. Both shared the same strategic vision, could easily see synergies (savings) in a merger,
and could benefit from the merger of world-class portfolios. In addition, Alcatel got easier
access to the North American market and Lucent benefited from Alcatel’s global presence in
many local markets. As a merged company with larger scale, we again have greater access to
investment banking and financial instruments to assist customers.
How do you see mergers between companies from different countries and those of
the same origin?
The whole world has become a market place. The physical boundaries and barriers have all
but vanished. Telecom products are standardized. Information-age companies have a lot more
in common and share similar views of where technology can take us. Consolidation has and is
taking place among carriers. This means fewer operators, making fewer investments in
equipment for instance. This has had a similar impact on equipment vendors. So it was very
natural for companies to join hands with former competitors for the common good of both.
Mergers have almost become a necessity to survival in the telecom business with even more in
sight. It should be easier for companies of the same country to merge, but mergers of business
cultures are very complicated and never easy.
To what extent the Chinese factor has acted as a catalyst for mergers?
The Chinese presence in the international market definitely has an impact on the merger trend.
In the past 10 years, we have witnessed their arrival in the international market place and have
seen them make extremely attractive offers to gain footprints in new markets. Their presence
has forced vendors to cut costs and bring down prices to be competitive, which is a good thing
for carriers and their customers. As Lucent, we felt the presence, and we continue to feel it in
today’s fiercely competitive market. So, resultant profit erosion coupled with actions to keep
portfolios in line with customer demands have definitely contributed to mergers.
Are the benefits of merger becoming visible for Alcatel-Lucent?
Yes. We have rationalized our products realizing synergistic benefits from the portfolio fit. Our
dynamic world-wide market strategy to transform today’s networks is really gaining momentum.
Another benefit is the scale of the companies. We have 19,000 R&D engineers within our
79,000 employees. This is a real strength since R&D investment is the lifeblood of our industry.
And I have already mentioned the advantage of global reach and local presence. Then of
course there are the savings of over 600 million Euros expected within the first 12 months. The
merger is working.
Do you think, that quality wise, the Chinese products are up to the international
standards?
I would say that quality of some of their products is as good. Others are not there yet, but
getting there.
Considering the European experience, how should countries like us go for 3G?
First of all, we need to understand that technology for the sake of technology is not the answer.
We must look at the Pakistan customer base. GSM just does not become 3G. Investments must
be made. A business case for 3G would have to show how EVDO which provides high speed
data can address those higher income clients, government organizations, etc. There is a
market, but its size must be determined, and there is definitely a clear advantage to the
company that successfully deploys 3G to the appropriate customers. It is a great technology.
3G and 4G (WiMAX) can definitely have a positive impact on lifestyles and quality of life. I
believe 3G and 4G can be successful in the country.
What business prospects do you see here in Pakistan?
Pakistan has recently boasted of a projected $9 billion investment in telecom. We are very
optimistic about the market and will continue to focus our efforts here. As a new merged
company, we can add greater value than we were able to offer separately.
How do you see the managed services area?
Managed services is one of our most successful and important business areas. We are able to
provide managed services in multi-vendor networks which has become one of our greatest
strengths. We have 13K people dedicated to providing services with a laser focus on
professional services, deployment, maintenance, as well as managed services.
What is your strategy towards getting and retaining human resource?
We have over 500 employees in Pakistan and want that number to grow. One of the most
important initiatives is to continue to invest in the developing local human resources. We want
to prepare trained people not just for our local needs here, but also to export skilled resources
to our operations in the Middle East and Africa. We have 20 engineers from Pakistan deployed
to Algeria, Egypt, and Afghanistan working on various projects. We also need engineers for
new product lines that are coming to Pakistan for which we will provide training to our
employees as well as to our customers. Sending our engineers to projects outside of Pakistan
not only has financial rewards for them but also exposes them to exciting international
environments. This is a big initiative for me, and on top of that, I have talked to the Regulator,
the IT Ministry, other government organizations, etc, offering to train their personnel at our
facility in Islamabad once the capacity and logistics are in place.
A personal imperative is to be able to offer such training to young Pakistani IT professionals in
government, education, and the military and at no charge. These young professionals would
get the opportunity to learn about and actually see and touch the latest technology and at the
same time get a glimpse of where we think technology is heading. They will go back and better
serve their organizations. As a selfish motive, I hope one additional benefit from this initiative
would be for our visitors to spread the word about their positive experience to their friends and
within their professional circles. At this time, education in Pakistan is a most important and
noteworthy imperative. Alcatel-Lucent would very much like to contribute to that.
|
|
|
|
|
