From 1981 until 1988, ABT's Canadian headquarters controlled all of the details of the business. Then, as one top manager explained, “We felt that we had to get closer to the customer, and we went first to Asia because that was where the action was.” So, in the late 1980s, ABT placed several sales people in the field in three regions: Asia/Pacific, Latin America, and Europe/Africa/Middle East. In 1997, Asia/ Pacific markets were 50 percent of all revenues, Latin America 36 percent, and Europe/Africa/Middle East 19 percent of sales. The United States “as not a market for ABT's equipment given the significant rural infrastructure already in place in the United States.
Asia/Pacific. The first subsidiary was in Hong Kong as “an easy way into China,” according to a top ABT manager. There were no customers, and it was expensive to maintain an office there. “Because we weren't even paying the light bills, we decided to move the Asia/Pacific headquarters to Manila to save on taxes and expenses, and in order to have access to a skilled labor force.' Soon after this move, a sales subsidiary was set up in China, followed by another office in Bangkok after a large project was won there.
By the early 1990s, ABT had more than 60 people on the ground in these three operations. These offices were staffed with technical sales people with an engineering background. They were rewarded on meeting a quota, and they operated autonomously from the headquarters. Their sales efforts centered on selling ABT's equipment and solutions to national telephone companies. These technical sales people placed orders with headquarters and provided service to the firm once the system was installed and in place. Many times, they relied on project engineering for technical details related to a bid or final customer proposal.
In the early 1990s, the Asian headquarters was moved again to Bangkok. As one manager stated, “With these regional offices, we cultivated relationships.” If a project or bid was around $1 million, headquarters would rarely get involved If the order was more strategic (from $5 million to $10 million in size), headquarters would interact closely with sales, working together on pricing, delivery, and technical specifications.
Latin America. The Latin America office was located in south Florida. At first, this region was staffed with sales engineers. Then, managers for different areas within LatinAmerica were brought in to strengthen the region's marketing abilities. In 1998, there were three area managers: one each for South America (included Brazil, Argentina, Colombia, and Peru), Caribbean U.S., and Central America. The total number of engineers and managers in this office was 12 in 1998. Sales support and project engineers were still located in Montreal to support Latin America project bids technical assistance, or operations. Most of the activity x•vithin this area was repeat customers, the national telephone companies. This Latin American sales and marketing area had nothing to do with the 1997 investment in rural telecommunications by ABT. In fact, most of the managers knew very few details about this investment transaction.
With the privatization of many Latin American telephone companies, managers from AB Telecom's Latin American office had developed a close 'working relationship with Telephonic (Spain's national telephone company) and STET (Italy's national telephone company) because these two companies have purchased significant stakes in many national tele phone companies in Latin America. This area had been growing consistently for AU Telecom in the 1990s.
One manager explained how deals are developed in this region: “We follow regulatory changes in countries that are considering privatization. We know that a piece will be rural, and money will be made available for rural according to the bids for this privatization. Our local representatives keep us advised.” Another manager explained, “We have not pushed much into the industrial business in Latin America except for one excellent industrial client - an oil company in Venezuela - and this relationship was gained through a technical representative on the ground with this oil company.” When asked about how they interact with R&D in Canada, one manager stated, “We don't worry about technology. . .. we worry about satisfying a need... we have the best product technically, reflected in our high quality and high price. . . . this combined with being close to the customer lands us deals. . . many of our deals in Latin America are renewals.”
One area manager in the Latin American division stated, “The greatest impediment to our international growth is resources - human resources. We are looking for people with language, engineering, project skills, and good interpersonal skills.”
Europe/Middle East/Africa. In 1998, the Europe/Middle East/Africa region was the most difficult, according to several managers. This was attributed to too many different regulations and frequencies across this region. Sales subsidiaries have been developed where a strong relationship with a national telephone company existed. Sales subsidiaries had been set up in Nairobi, Saudi Arabia, South Africa, Sweden, and the U.K. The head of this regional structure had recently resigned.
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