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Company Interview Excerpt
ROBERT E. SWITZ - ADC TELECOMMUNICATIONS, INC. (ADCT)


Full article published: 10/01/2007


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TWST: Please begin with a brief historical sketch of the company and a picture of the things you are doing presently.
Mr. Switz: ADC is currently a global supplier of communications network infrastructure solutions and services, including fiber and copper connectivity products, wireless coverage and capacity products, enterprise products, and also a service group to assist our customers in designing, maintaining and deploying their various networks. We serve nearly every type of carrier and almost every major carrier around the globe, a blue-chip customer base of PTTs and RBOCs, including the last three remaining in the United States, as well as all the wireless service providers, independent telephone companies, cable operators, and government operated networks. Virtually just about all types of communication networks have some form of ADC product content in them. In terms of our current focus, we are one of the leaders in assisting carriers around the globe in their current initiatives to deploy fiber-based broadband to the home or to the node as it is referred to in the industry. In the US, we are a leading supplier to Verizon and AT&T. Around the globe, where other carriers are now starting to look at the many advantages of deploying fiber, ADC is assisting them with that transition. In addition, we are addressing the major trends in networks today, which is the migration of legacy networks to all-IP and optical capabilities.

TWST: Would you describe the competitive landscape?
Mr. Switz: The competition in our industry has been especially keen since the downturn of the industry in 2001. Coming out of that, we've seen, particularly in the US, the consolidation of the customer base. When we look at our top 25 customers five years ago compared to today, there are only about 12 of them remaining. While there has been tremendous consolidation of the customer base, there has not been a significant consolidation in the supplier base, resulting in a significant concentration of buying power. As a result, there is more competition for less business, as there are fewer standalone carriers. Since many of the same suppliers are competing for a limited or significantly reduced customer spend, it results in severe price pressure, as well as more demanding terms and conditions. However, their expectations regarding innovation, high quality and reliability have not been reduced.

 

Tickers included in this excerpt: ADCT

 

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