For Small and Mid-Sized Businesses,
It’s Time to Level the Playing Field
By Alex J. Mandl
The global communications industry is much in the news these days. But the big, bold headlines about multi-billion-dollar mergers and worldwide acquisitions have left many owners of small and medium-sized businesses asking a simple question. “What does all of this mean for me?”
Small and mid-sized business owners and executives know that for years, the communications needs of the Fortune 500 companies have been better than well-served. They have been fabulously served. Significant discounts, custom-tailored products, prompt and attentive customer service and the best in high-speed, high-capacity communications technology have been offered up cheerfully to the largest companies that, not coincidentally, have the most money to spend.
But not many of those benefits have trickled down to the smaller companies that have fewer than several hundred employees and still fewer telephone lines. Now, all of that is about to change. New technology, a new regulatory environment, and new customer needs all have played a part in creating this new opportunity.
The Telecommunications Act of 1996 opened up the local communications market to competition for the first time in nearly three-quarters of a century. New communications companies seeking to offer new, competitive services were allowed to challenge the existing local telephone companies for their customers.
In the two years since the Act was signed into law, progress has been steady, but slow. New competitors initially thought they could build their businesses by reselling the services of or leasing network elements from the existing large, local telcos. For a host of reasons, including low or non-existent profit margins and erratic cooperation from the existing local carriers, that strategy largely has been abandoned.
Now a group of smaller companies including Teligent are beginning to bring the benefits of competition lower prices, better service and greater choice to the small and medium-sized business market. They are achieving this goal by building their own advanced, high-speed communications facilities that will give them direct access to customers, bypassing the remnants of the old Bell system.
Teligent and other new companies are using new technologies including permanent wireless links that connect customer buildings to advanced communications networks to deliver lower-cost, high-speed services to the smaller companies that previously were unable to afford leading-edge communications connections.
This development comes at a critical time for small and medium-sized businesses just beginning to harness the power of high-speed data transmission, sophisticated graphics, videoconferencing and other new applications that demand a big “information pipe.” Because these new networks can carry voice, data and video signals with equal ease, customers who have been accustomed to having their information dribbled through a garden hose now will have access to a water main.
As these new competitors proliferate in Los Angeles during the coming months, small and medium-sized business people will begin to discover that they DO have a choice for communications services. They’ll find out that they no longer need rely on the old-fashioned, “copper cage” technology that limits the ability of the existing local carriers to serve their special needs. And they’ll discover that all the news about changes in the communications industry can have a direct and measurable impact on their businesses and their customers. And that’s a good thing.
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Alex J. Mandl is Chairman and Chief Executive Officer of Teligent Inc., a Vienna, Virginia based full-service, integrated communications company offering local, long distance, high-speed data and Internet services in 74 major metropolitan areas throughout the United States.