Going Global?

Posted: 07/1998

Going Global?
European Alliance Can Help Make the Introductions

By Charlene O’Hanlon

Everyone’s heard the expression, "It’s not what you know, it’s who you know."
Nowhere is that more true than in international telecom. But long distance companies
looking to break into the European market now have an ally to help them get their
proverbial foot in the door.

The European Competitive Telecommunications Association, or ECTA, was formed in May
1997 as a resource for new market entrants wishing to establish themselves in Europe.
Since its inception, ECTA has attracted major players in the telecommunications
industry–both European and American–as members; proof of sorts of the need for
competition in the European telecom market.

"Progress [in deregulation of the European market] has been disappointingly
slow," says Michael Ryan, partner with the international law firm Coudert Brothers
and secretary of the association’s board of directors. "I have, for some time, felt
the lack of an organization such as ECTA to press the case for competition in Europe. When
I was approached to lend support, I accepted with enthusiasm."

ECTA Founding Members

Cable & Wireless plc

SITA-EQUANT Network Services

MCN n.v.

Coudert Brothers

USA Global Link Inc.

Unisource Carrier Services

Deep Roots

Thank a core group of European telecommunication companies for the creation of ECTA. It
was their belief that an association was needed to assist European regulators open their
markets to competition. Deregulation had been implemented, and these European companies
saw opportunity looming on the horizon.

"The deregulated European market is nearly as foreign to European service
providers as it is to U.S. enterprises, maybe more so because U.S. companies are already
familiar with competition in telecom," says Mark Petrick, director of communications
at USA Global Link Inc. and a member of ECTA’s board of directors. "ECTA offers
European companies the same advantages that it offers U.S. companies; namely, an
association dedicated to the profitability of every member."

As the European telecom companies see it, the association is a win-win situation for
all involved: European regulators have help opening the markets, and companies interested
in entering the telecom race in Europe have a leg-up on their competition.

"[Coudert Brothers] is a law firm and, therefore, we have a different perspective
on the marketplace than the service providers who are our clients," says board member
Ryan. "Our fate is tied to the fate of our clients. When they succeed, we succeed.
Since ECTA clearly fills a gap in their needs, it will have spin-off benefits for this
firm, also."

"Equally as important [in its mission], ECTA creates opportunities for networking
and business development," says Elizabeth Schumacher, executive director of ECTA.
"Through ECTA-sponsored or endorsed conferences and exhibitions, partnering with
European and international trade associations and our much-used Speaker’s Bureau, we
encourage our members to get out and get noticed."

And, by all accounts, the association has gotten noticed. After only a year in
existence, ECTA can count big-time telecom companies such as Cable & Wireless plc,
Lucent Technologies Inc. and USA Global Link among its members, with additional well-known
companies joining regularly. In addition, the Telecommunications Resellers Association
(TRA) and the Competitive Telecommunications Association (CompTel) have joined ECTA as

"We think of ECTA as a European TRA, and expect that it will offer the same
competitive benefits in Europe that TRA has given us here: networking opportunities with
business associates, industry presence and regulatory muscle," says Petrick.

ECTA’s key objectives are to:

  • Create a Pan-European trade association to address industry-related issues in a united
  • Represent the industry to government and regulatory bodies with one clear voice;
  • Assist market liberalization through cooperative efforts and networking;
  • Assist new market entrants and develop strategies for growth within the industry;
  • Lobby regulators for fair universal access and interconnect charges;
  • Create a forum for networking and business development throughout Europe; and
  • Build membership to amplify the power of the association.

To that end, ECTA provides its members everything they need to enter the European
telecom market: educational programs, market research, up-to-date tariffing information, a
database of service providers and resellers and a European telecom publications/media

As well, ECTA takes part in a number of conferences and exhibitions, through either
sponsorships or endorsements, and partners with other European and international trade
associations to provide its members the latest in market information.

"ECTA will provide three valuable services: a defined and strong presence for
carriers and resellers in the emerging open markets of the European countries, increased
opportunities for dialogue with other enterprises for the purpose of making money, and a
united industry presence on the regulatory front for resellers and new entrants onto the
European stage," Petrick says.

Fierce Competition

Although deregulation has opened the doors to competition in the European market, the
opportunity to conduct business in Europe–or anywhere, for that matter–is worthless
without the right tools.

Through its service offerings, ECTA hopes to arm its members with all the ammo they
need to wage war against the motherland’s incumbent telecommunications companies. As an
example of its smart bombs, ECTA’s website lists the results of a survey commissioned by
The Cap Gemini Group, a management consulting and information technology services company,
and Cable & Wireless plc, which shows that less than one in five telecom customers in
the United Kingdom is happy with the customer service he or she receives. Complaints
include interactive voice response (IVR) systems that offer so many options that they
become too confusing to use and queuing systems that do not inform the caller the
estimated time on hold.

Whether or not this dissatisfaction was evident during the years of regulation isn’t
specified in the survey; however, The Henley Centre, which conducted the survey, makes it
clear in its summary that telecom companies conducting business in Europe must become more
service-oriented or risk losing customers.

Casey Freymuth, president of Phoenix-based Group IV, a strategy consulting and
publishing firm to the telecommunications industry, notes that tools such as those ECTA
provides its members can be invaluable in an otherwise fickle industry.

"The European Union, for example, has been very active and is a key organization
in promoting deregulation. There have been some key moves on [the Union’s] part recently
regarding interconnection rates by wireless carriers that it has been coming down on hard,
so I think there is some benefit. How much [of that benefit] belongs to these
organizations and how much is result of pressure from the United States is hard to
measure, but I think certainly we’ve seen signs of relief from the industry from some of
these moves," Freymuth says. "However, these organizations bring about other
benefits that have nothing to do with the regulatory side, such as networking
opportunities. Any time these organizations get together, they tend to do well."

Moving Ahead

Judging from the kind of crowd within ECTA’s ranks, the association’s future looks
quite rosy.

The association has formed committees in the areas of legal/ethics, regulatory,
membership, conference and associate members and, during its annual symposium and
exhibition to be held this fall, additional committees will be formed that will represent
the interests or specific market segments, Schumacher says.

"Europe is an enticing advanced marketplace. Telecommunications is quickly
becoming a globalized industry," Petrick says. "It is important for any telecom
company with plans beyond the U.S. borders to have Europe in their business plan. ECTA can
help all carriers and resellers as a unified platform for business and regulatory

For more information on ECTA, visit the association’s website at Companies interested in joining may
sign up at the website or contact Schumacher at 011-44-1189-887034.

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