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Carrier Services
EMBARQ’s First Birthday
Finds Success As A Standalone Company
by Sean Buckley
For some companies, Neil Sedaka’s famous ballad ‘Breaking Up is Hard to Do’ might be the right tune, but not for EMBARQ.
In an era of massive consolidation within the telecom service provider industry, EMBARQ, the former local telephone division of Sprint, is holding its own. And the results speak for themselves.
For Q1 07, EMBARQ reported net operating revenues of $1.59 billion, operating income of $371 million and diluted earnings per share of $1.05.What’s more, EMBARQ stemmed the tide of access line loss to the cable and other competitors, losing 15,000 less traditional access lines than it did previously in Q1 06.
Jim Hansen, EMBARQ’s SVP of Network services, attributes the company’s initial success to basic three basic fundamentals: ‘happy employees make happy customers makes a happy Wall Street.’“If you’re going to have a strong ongoing company, it’s vital your customers are pleased with your service, and they are telling us they are much happier with how we are doing our business and our new products,” Hansen said. “Our innovation is sparking a new image in their eye relative to we are not just a new telephone company, but the company that’s going to meet their needs in the future.”
Integrated Network Ambitions
When it comes to network and services innovation, EMBARQ, unlike its other larger compatriots, focuses on leveraging various technology platforms for multiple needs.
“One of our focuses is to try to make a capital efficient network as we can, and instead put in a more capable network in an opportunistic fashion,” Hansen said. “We’re still watching our capital expenditures, but we’re not doing it by closing up shop and harvesting. Instead, we are pinpointing where we put our innovation monies into and still taking care of our customer base so they are still delighted.”
One area of innovation for EMBARQ is integrated wireless/wireline services or fixed mobile convergence (FMC). The first step in EMBARQ’s FMC drive was the debut of its SmartConnect and SmartConnect Plus services. Smart Connect allows a user to seamlessly move calls between their wireless and wireline networks, while Smart Connect plus can move calls between the WiFi and cellular network via a specialized phone (see Converging Paths - FMC: Where Wireline & Wireless Meet).
The second step towards FMC is its ONE Voicemail service, which integrates wireless voice mail messages with the wireline phone (see EMBARQ Inches Toward FMC).
While EMBARQ lacks its own wireless network (it acts an MVNO on Sprint’s network), the service provider believes these integrated wireless/wireline services will create customer stickiness.
“We believe it’s our imperative to own the premise,” said Dan Hesse, Chairman and CEO of EMBARQ at Morgan Stanley’s 2007 recent Communications Conference in Washington DC. “When you’re at home or at work, you use the landline service, and we believe we need to be in wireless and integrate wireless with wireline.”
Energized Enterprise Focus
When EMBARQ was part of Sprint as its local telephone division, the company had success in serving enterprise customers; however, the focus was mainly on wireless.
And while Hansen won’t downplay the importance of wireless, he feels the new standalone company can offer a more inclusive service set.
“What we have been able to as we have become our own company is focus on their total needs,” Hansen said. “Their wireless needs are still critical, but we’re making sure we’re back into the CPE business in terms of their landline and data needs.”
EMBARQ’s focused enterprise service strategy is paying off. Earlier this year, EMBARQ beat out the usual service provider suspects to top of JD Power’s voice satisfaction survey for large enterprise customers.
But it’s not just all about voice. EMBARQ continually recognizes the need for new data services, including both traditional legacy ATM, FR and Ethernet.
Still, Hansen says it has to approach new enterprise service options with caution.
“The key is how do you do the transition in an affordable fashion and how to do it so your customer’s needs aren’t trampled on,” he said. “As you move to data, you got to make sure you have the right security in place, make sure you have the right reliability in place because in the end they have to feel like they’re getting everything they got in the old service.”
Nonetheless, the demand for higher data speeds and services for both business and residential users continues to rise. To keep in pace with that demand, EMBARQ has been deploying more fiber in targeted areas and then utilizing copper bonding technologies to transport traffic from DSLAMs into COs, direct business connections, and as an interim fiber alternative (see Embarq: A Practical-Minded Broadband Approach).
“Bandwidth continues to grow,” Hansen said. “What we’re doing is trying to meet that demand in the best way possible using copper bonding, and we’re working hard with our vendor partners to leverage their capabilities as much as we can.”
More Information:
Converging Paths - FMC: Where Wireline & Wireless Meet
FMC is driving fixed-line and wireless service providers to minimize their voice revenue line loss
EMBARQ Inches Toward FMC
Unified Messaging Deal With Unisys Sets Stage For Later Convergence
Embarq: A Practical-Minded Broadband Approach
2007 Will Focus On Network Expansion, New Services
NTELOS’ Common Service Platform
Leverages Fiber, IP Foundation For Converged Services
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