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Telecommunications Industry

Making It and
Making It Pay

High-tech companies growing by the gigabit 
hardwire the state's future to a digital economy


Case studies: How N.C. companies are using telecom equipment to improve profits and efficiencies
Below: a Cisco Systems quality assurance engineer checks circuitry at the company's RTP facility.

By Lisa H Towle

Despite rampant mergers, acquisitions, alliances and restructurings in the global telecommunications industry in the past couple of years, the growing number of IT companies operating from North Carolina is swelling the state's reputation as an East Coast Silicon Valley. The state Department of Commerce counts more than 4,700 electronics, telecommunications and information technology firms employing nearly 216,000 people in the state. Fiber-optics maker Corning now employs more than 6,000 here and is among the state's Top 10 employers.

Corning and the many other telecommunications companies in North Carolina are lapping up the nation's burgeoning spending on hardware and software, which last year totaled $135.4 billion, up11.5 percent from 1998.

Dwight Allen, vice president of the North Carolina Telecommunications Industry Association (NCTIA) and president of mid-Atlantic operations for Sprint, says, “Without question North Carolina is very well-positioned when it comes to the telecommunications industry. Not only does the state work toward cooperative relationships in the regulatory arena, it has built a state-of-the-art telecom infrastructure.”

Tar Heel telecom companies, a mix of both large and smaller players, tend to break down into seven categories, although they often overlap:

Service providers that provide local and long-distance wireline telephone service (BellSouth, Sprint and Verizon, formerly GTE, are the largest in the state);

Wireless communication services (often furnished by a division of the largest wireline companies);

Satellite telecommunications services;

Internet service providers;

Customer premise equipment manufacturers (Lucent Technologies, Nortel, Fujitsu, Siemens and Alcatel, for example);

Networking equipment and fiber optics manufacturers (Cisco, Nortel and Lucent are some of the bigger names in this category);

Wireless and satellite communications equipment manufacturers (an example is Ericsson.)

Given its cachet and proven record as an economic engine, it's no wonder that the state has courted the “clean” and expansion-minded industry.

Earlier this year, Corning, the world-leading supplier of optical fiber, announced the expansion of two of its manufacturing capabilities in North Carolina, bringing $550 million in investment and 500 jobs to Cabarrus County and $100 million in investment to New Hanover County. Gov. Jim Hunt characterized the state's largest single business investment announcement ever as “a defining moment for North Carolina's telecommunications industry.”

When completed, Corning's newest investment will bring its North Carolina total to more than $2 billion. Moreover, after its recent acquisition of Siecor in Hickory, Corning announced it would locate the global headquarters of its Cable Systems division in Catawba County. Its neighbors there CommScope Inc., the world's largest producer of coaxial cable, and Alcatel Telecommunications Cable, the French manufacturer of optical fiber, further adding to the county's reputation as Telecom Valley.

Farther east is Greensboro, home to RF Micro Devices. In September, the 1,000-employee company placed second on Fortune magazine's list of the nation's 100 fastest growing companies. “Demand for wireless handsets is growing at 50 percent a year, and RF Micro makes the communications chips they need,” says the magazine, whose criteria for the list included revenues and market capitalization of at least $50 million.

Simply put, explains Suzanne Rudy, RF Micro's treasurer, “we make power amplifiers, those components that take the signal and magnify it so people can hear more clearly while talking on their cell phones. The thing about our amps is that they use less energy and therefore talking time is lengthened.” The company's customers include Nokia, Ericsson, Motorola and Qualcomm.

Mike Stanley, president of NCEITA, notes that it's such innovation that helps make North Carolina a telecommunications hot spot.

And things are about to get a lot hotter. Industry analysts and insiders agree that the future of telecommunications is in the convergence of voice, data and video. Last year, for the first time, service providers moved more data traffic than voice traffic.

Businesses have sunk substantial sums of time and money into Internet applications; family, friends and associates stay in contact via e-mail; and those with home Internet access are likely to search for information on one of the more than 800 million data pages.

Currently, the equipment in the ground is dedicated to routing voice traffic. The challenge is to ease the strain by developing the machinery that will intelligently, speedily and simultaneously move ever greater amounts of voice, data and video traffic. It is key to the North Carolina divisions of companies such as Cisco and Nortel, among others, who are in a horse race to make this happen.

Says Joe Freddoso, a spokesman for Cisco Systems in Research Triangle Park, home to 11 telecom companies: “This is one of the best areas in the country for telecommunications engineers. That's why the big players are choosing to grow their businesses here.”

COPYRIGHTED MATERIAL. This story first appeared in the October 2000 issue of the North Carolina magazine

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