Shang High Life, #8

Shang Hai Life, #8 November 11, 2001 Of Dot-bombs and Telecoms Except for cursory references, I haven’t mentioned squat about what I’m doing for a living, here in Shanghai. Forgive me. These missives must read like I’m just enjoying an adventure in a strange and far-away place. Of course, I am and it is. Perhaps no-one gives a shit what I do for a living. I present two-fold evidence for this hypothesis: (1) zilch requests for enlightenment on the topic, and (2) the intrinsic lack of sexiness in telecommunications gear other than Nokia mobile phones. On reflection, these are insufficient grounds for silence. The former has a history of failing to stop me, and the latter is a global misapprehension, much like commonly mis-quoted film noir dialogue. Alcatel sells really expensive high-tech stuff to phone companies. If you can name your phone company, they have some of our stuff: everything from satellites and undersea cables to the big switches that determine whether you get connected to Schenectady or Sierra Leone. We also make more pedestrian stuff, like routers and mobile phones, which, admittedly, are closer to most people’s hearts….or, at least, closer to being understandable. I joined Alcatel in June, at precisely the moment the telecommunications industry crashed. Those among you with a taste for others’ comeuppance may note that I have a good trend going. I joined internet healthcare about a pico-second before pundits pronounced it pulse-less---part of the broader cratering of internet businesses, in general. Businesses that had, I might add, fueled an almighty boom in telecommunications. It took about a year for the dot-bomb to fall through the economic atmosphere and hit the telecoms industry. It made a direct hit just about the time I landed in Shanghai to work for one of the world’s largest telecoms equipment businesses. So, clearly, I can pick ‘em. When I arrived, in late June, Alcatel had just thrown in the towel on its bid to buy Lucent. The deal-that-almost-happened was good for us. A lot of average folks had heard of Lucent, but few knew Alcatel. Now, people have heard of us. “Aren’t you the guys that almost took out Lucent?” That’s our cocktail-party résumé. You have to believe that just about any kind of notoriety is good in order to like having a reputation for failed acquisitions. Compared to what was happening to our industry brethren (and sistren), however, dropping the Lucent deal wasn’t so bad. The whole industry was doing a good impersonation of a drunk falling down a flight of stairs. One of our biggest competitors wrote off 20 billion dollars. That’s with a “b”. (Apparently, they put the “ill” in billion.) I was telling this to a non-businessy friend, who asked, “Is that, like, real money, or is it imaginary money?” I suggested she ask the people who had their retirement nest-eggs invested in the stock. Not that we were unscathed. We just weren’t getting killed quite as thoroughly as the rest. During the boom, we had been criticized for a strategy observers had thought muddle-headed. Other companies made squillions specializing in some chosen area of the industry. Nokia chose mobile handsets, for instance. Cisco focused on routers. We did exactly the opposite. We committed to making everything, every damn thing required for a phone to complete a call or for a computer to hot-foot it down the info highway. The weenies call it an end-to-end product portfolio strategy. And, frankly, it didn’t look very smart. As Cisco made a killing doing nothing but routers, etc, and every other telecoms gear maker likewise chose a product niche, we grew modestly by trying to be good at everything. The whole industry, including Alcatel, grew like buggery. We just didn’t prosper as much as the rest. Everyone who claimed to be a telecoms expert said that, since we had no specialty, we couldn’t compete with the specialists. Those niche players would always have newer, slicker technology. As a result, our stock price, while it zoomed through the roof during the boom, didn’t reach the vertigo-inducing heights of the Ciscos and others. When the crash came, however, we had less far to fall. What had been assailed as our vices, now were lionized as virtues. As the mobile handset market tumbled, the mobile handset specialists got creamed. We weren’t as exposed in handsets, so we only got pureed. As dot-coms stopped buying routers---or anything at all, really---the router makers got thoroughly routed. We merely took a detour. But that’s nothing compared to the guys that specialized in big, bad optical networks. Think fiber optics. Those systems can cost billions. And those billions started revisiting the optics boys in the nastiest possible ways. It turns out that we had something the niche players didn’t: a lot of customers with a whole lot of our gear. It was a blessing, a combination of long-standing customer relationships and a huge installed base (weenie-speak, again). Even though they stopped spending as much as we hoped, they continued spending with us. It saved our geeky asses. Well. Not all our geeky asses. You may have read that a number of Alcatel asses have been laid off. Another ten thousand have just been “workforce adjusted” in Europe. These days, it’s cause for celebration that we don’t have to kill off as much of our workforce as the other guys. And we’re nearly dancing in the hallways about our financial performance: sales might be the same as last year and we might lose only a couple hundred million bucks. In current circumstances, that makes us hot. We are not doing well; we just suck less than the other guys. It is serendipity alone that has landed my own very lucky ass in the one robust part of Alcatel’s business. The Asia Pacific will be Alcatel’s only major operation to grow this year. So, just like last year, when concerned friends called asking if I needed to be rescued from a failing dot-com, and I reassured them that mine was fine, I am now fending off rumours of my imminent professional death. The problems we have in the Asia Pacific are those of growth, not of earthward plummet. I shall remain vigilant, nevertheless. History suggests that telecoms is a fickle business. My own experience confirms it. The first time I worked in the industry was unfortunately brief. On the other hand, it did leave a lasting mark, however faint, on a large number of lives. Alas, it was a long, long time ago, and it wasn’t for Alcatel. My employer was Northern Telecom, they who more recently changed their name and lost 20 billion. It was a pleasant stint, however short. And there were no hard feelings at the end. I just got a handshake and a cheque. It may, nevertheless, have been the most lasting work I’ve ever done. For there are still places in the world---Nebraska? Nepal?---where, with the cosmic conspiracy of a misplaced digit, you may still hear me, in a baritone enunciation of your fate, proclaiming, “The number you have dialed has been disconnected or is no longer in service….” And, after all, Isn’t that what “professional communicator” means? * * * If you’ve got a net connection, a little time, and a desire to see pictures of scant relevance to anything, feel free to try: http://communities.msn.com/Houstoninastrangeland/pictures Among other things, you’ll see lots of people in a pub in Sydney, Alcatel’s Shanghai offices, my betrothed in a bathing suit, and China’s version of Elvis, Mao Tse Tung. Provided as a vain and mis-guided public service. Enjoy.