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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