Rural teIephoiy. AB Telecom researchers, designs, and manufactures fixed wireless systems mostly for installation in rural and remote areas, to aid in rural telecommunications. ABT manufactures all components required for rural installation It subcontracts with local contractors to install the systems.
The main application of the AB Telecom product is to connect remote villages and towns to the national telephone system grid. Fixed wireless is a cost- effective solution for many national telephone companies to connect to rural locations; the cost of installing a fixed wireless system is far less than that of laying miles of fiber or copper cable to the same locale. ABT's traditional customers have been national telephone companies.
For this business, ABT considers Alcatel, NEC Japan, and Lucent to be its direct competitors, but the fixed wireless systems are a very small portion of these large multinational firms' sales, whereas ABT specializes in the fixed wireless systems and technology.
Industrial applications. New applications of ABT's wireless systems have been recently recognized. Corn- panics in industries such as oil, gas, and electricity generation require remote sensing of dispersed operations. In early 1998, this type of business had grown to comprise 25 percent of ABT's revenues. Much of this business was developed “by chance,” as explained by one top manager:
We realized that the industrial portion of sales could be more significant. The industrial market was not properly marketed to, nor were their needs involved in, our R&D efforts We realized that this area could become significant if we added more products that customers wanted because we are one of the largest companies selling to this fragmented and diverse market.
This manager went on to explain how industrial customers were developed in one Asian country:
Our industrial customers developed just by chance Fin this country]. Now, we have 100 industrial customers. We had no idea what the customer wanted. Because selling to this national telephone company was slow and government controlled, we stumbled upon the electric companies Who were interested. It started off with a change of attention of one salesperson already located in this market, but it developed in a mostly word of mouth way ... this counts for a lot in [this country]. We gained a reputation for being a reliable supplier, but growing this business was not part of a plan . - - it just happened.
The estimated potential revenue from this market is around $100 million per year, but it is spread among hundreds of industrial customers- One ABT manager explained, “Tremendous sales and marketing efforts are required to obtain a $5 million order, but once a customer orders and is satisfied, they are
• more likely to repeat the purchase. . . . We need more information to develop the business It is
difficult to find out where the big industrial users are worldwide mostly trial and error,” stated one top ABT manager.
Urban wireless. ABT also had developed and was testing fixed wireless systems in urban settings. the potential customers for this product were telephone companies, both the incumbent telephone company as well as start-up carriers, especially in Europe. A start-up company would offer data services in competition with the original telephone company. The ABT system would be used to transmit data reliably within dense urban settings. This application has required some modification to the original ABT product lines. “With data applications, we are really starting from zero, but we should be able to double or triple them in the future.” In 1998, this system was being tested in the U.K. Only a few technical and marketing people were involved and only in a haphazard way.
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