BtoB: How are business conditions?
O’Malley: Obviously there’s concern over the economy right now that’s pervading every industry, and we’re no different.
We know that generally our industry is driven by consumer spending on telecom services. The extent that you, me or anyone else charges minutes on their cell phone or uses mobile data applications—that’s what drives telecom carriers to invest in their network and purchase equipment from us. … There’s a lot of supposition in the economic community about how long this downturn is going to last. Will it flush out by midyear? Will it take longer than that? There’s a lot of uncertainty there.
We feel like we can be successful and we’ve got a great strategy, but we’re going to monitor the environment and go from there.
BtoB: You believe your strategy is strong enough to withstand the current recession. What exactly is that strategy?
O’Malley: Our strategy really is to focus into three major business areas: optical networking, which is kind of the core infrastructure, the center brain that runs the telecom network; mobile networks, since there’s so much growth and spend in mobility and mobility’s become the most important part of how people communicate; and business services, because we’re still seeing continued growth in enterprise services and ethernets—and corporations are going to still need to function, and they’re going to require these services.
There’s alignment from a strategy standpoint through the entire company around that. So that is where we’re focusing from a marketing and positioning standpoint, from a product road map and feature functionality standpoint, and from a sales perspective.
BtoB: You said consumer spending ultimately drives your business. What differences do you see between consumer spending on telecommunications compared with other goods and services?
O’Malley: We are certainly seeing a change in [user] demographic. As you skew younger, people view more and more of these services as a utility, as a necessity. Internet access is no longer a luxury; it’s how I live my life. [Tellabs’ current marketing campaign, “Inspire the New Life,” uses digital media, such as audio and video podcasts, to communicate its expert understanding of this demographic to clients. Slack Barshinger & Partners, Chicago, and Gerard Design, Warrenville, Ill., worked on the campaign.]
BtoB: What specific efforts are you making in new media and mobile?
O’Malley: We’ve done specific things to deliver our message through the medium. We’ve done audio and video podcasting, for example, to show that we understand this next-gen set of services. We’ve gotten very impressive results in terms of the number of downloads and the reaction of our customer base. … On top of that, we’re also seeing new applications that we want to leverage, to say [to our customers], ‘These are things that are going to change the way you use the network and, because of that, you need to view the network differently.’ [The network] will have different requirements that Tellabs can help with.