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TOP TELECO EMPLO XXXX
VAULT GUIDE TO THE TOP
TELECOM EMPLOYERS
© 2005 Vault Inc.
TOP TELECO EMPLO VAULT GUIDE TO THE TOP
TELECOM EMPLOYERS
EDITED BY TYYA N. TURNER AND THE STAFF OF VAULT
© 2005 Vault Inc.
Copyright © 2005 by Vault Inc. All rights reserved. All information in this book is subject to change without notice. Vault makes no claims as to the accuracy and reliability of the information contained within and disclaims all warranties. No part of this book may be reproduced or transmitted in any form or by any means, electronic or mechanical, for any purpose, without the express written permission of Vault Inc. Vault, the Vault logo, and “the most trusted name in career informationTM” are trademarks of Vault Inc. For information about permission to reproduce selections from this book, contact Vault Inc., 150 W. 22nd St., 5th Floor, New York, NY 10011, (212) 366-4212. Library of Congress CIP Data is available. ISBN 1-58131-321-7 Printed in the United States of America
ACKNOWLEDGMENTS Thanks to everyone who had a hand in making this book possible, especially Tyya Turner, Marcy Lerner, Laurie Pasiuk, Mary Conlon, Elena Boldeskou and Kelly Shore. We are also extremely grateful to Vault’s entire staff for all their help in the editorial, production and marketing processes. Vault also would like to acknowledge the support of our investors, clients, employees, family and friends. Thank you!
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Table of Contents INTRODUCTION
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Telecom Calling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
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ALLTEL Corporation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10 AT&T . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15 BellSouth Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22 Charter Communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27 Cingular Wireless . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33 Cisco Systems, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37 Comcast Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45 Corning Incorporated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .50 Cox Communications, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .56 The DIRECTV Group, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .61 EchoStar Communications Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . .67 Lucent Technologies Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .73 MCI, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .81 Motorola, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .88 Nextel Communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .95 Nokia Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .100 Nortel Networks Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .107 QUALCOMM Incorporated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .114 Qwest Communications International Inc. . . . . . . . . . . . . . . . . . . . . . . . .119 SBC Communications Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .125 Sprint Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .132 Verizon Communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .140
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Alphabetical Listing of Employers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .147 About the Author . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .149
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Introduction Telecom Calling In simpler times, the word “telecommunications” might conjure an image of a telephone – and not much else. These days, telecom is an industry encompassing everything from local and long-distance phone services to wireless communication, Internet access, and cable and digital television. In the U.S., total spending for telecom services reached more than $720 billion in 2004, and is expected to hit the $1 trillion mark in 2007, according to the Telecommunications Industry Association (TIA). Internationally, the TIA predicts telecom spending, estimated at $1.5 trillion in 2004, to top $2 trillion by 2007. For whom the bell tolls Established in 1877 as American Bell, AT&T enjoyed the largest share of the industry pie for nearly a century, thanks to the government’s belief that the utility constituted a “natural” monopoly. That monopoly crumbled in 1969, when the Federal Communications Commission (FCC) allowed other companies to play in Ma Bell’s sandbox. Companies like MCI were quick to get in the game. But monopolies don’t disappear overnight – to encourage competition in the long-distance market, the Department of Justice followed up with an antitrust suit against AT&T in 1974, eventually resulting in the division of AT&T into a long-distance retailer and seven regional Bell operating companies (RBOCs), which would compete in the local call market as incumbent local exchange carriers (ILECs). The final breakup took place in 1984. The industry thrived under the breakup, exploding into hundreds of smaller competitors, lowering the cost of long-distance calling dramatically. While AT&T held about 70 percent of the market in 1984, it holds about a third today, according to Hoover’s. Still, it’s these so-called “Tier 1” carriers – AT&T, Sprint and WorldCom – that make up the bulk of the long-distance market. Visit Vault at www.vault.com for insider company profiles, expert advice, career message boards, expert resume reviews, the Vault Job Board and more.
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Untangling the wires As the long-distance market diversified, the local exchange market remained relatively homogenous. The Telecommunications Act of 1996 aimed to change that, deregulating entry into local markets and requiring that the so-called Baby Bells, or incumbent local phone companies, retail their network elements to smaller competitors. The incumbents were required to open their networks at reasonable prices, with the goal of decentralization of the system into a “network of networks.” The act also temporarily blocked an RBOC from entering the long-distance market until it could prove that there was sufficient competition in its local territory. Another provision of the Telecom Act, allowing RBOCs the right to sell cable television services and phone equipment, proved to be a boon for the strongest RBOCs. Thanks to those services and the entry of the Babies into long distance, the Telecom Act actually had the opposite of its intended effect, allowing a few RBOCs to solidify their positions and dominate the market through mergers and acquisitions. Today, there are just four RBOCs – Verizon Communications, BellSouth Corp., SBC Communications, and Qwest Communications International – dominating both local phone service access and the burgeoning DSL (digital subscriber line) markets. Still, sniping among the RBOCs and long-distance giants like MCI and AT&T over network access rights continues. As late as May 2004, the FCC was engaged in a dispute between the Baby Bells and the long-distance carriers, as the LD companies argued for increased access to local calling networks. Merger mania The Telecom Act ushered in an era of merger fever among telecom companies. In 1997, Bell Atlantic purchased little sib NYNEX for $25.6 billion, and SBC bought Pacific Telesis. The following year, SBC acquired local and long-distance provider Southern New England Telecommunications, entering the LD market through this Telecom Act loophole. SBC also acquired Baby Bell Ameritech for 2
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$68.8 billion, and Bell Atlantic merged with GTE to form Verizon. Also in 1998, Qwest Communications International bought longdistance company LCI International, entering the struggle between the big three of long distance, AT&T, Sprint and MCI. The next year, Qwest’s bid to acquire US West (the smallest of the Baby Bells) defeated that of fiber optics leader Global Crossing of Bermuda. Also in 1999, AT&T acquired cable operator Tele-Communications, Inc. and merged with MediaOne Group in a $44-billion deal. Meanwhile, MCI was folded into WorldCom for $47 billion, (more on this later) becoming the world’s leading Internet carrier and a full-fledged global telecom company, boasting a 25 percent share of the U.S. longdistance market after the deal. The activity wasn’t limited to America’s shores. Telecom became truly global in 1997, when 70 members of the World Trade Organization agreed to open up their telecom markets to each other at the start of the following year. Those 70 countries control 90 percent of worldwide telecom sales. Nearly all telecom companies around the world had privatized in anticipation of this expanded level of competition. The accord led to a rush of international deals, especially in the world’s second-largest telecom market, Japan. In 1999, British Telecommunications and AT&T partnered to acquire a 30 percent stake in LD operator Japan Telecom, combining their Japanese ventures under JT. Britain’s Cable & Wireless bought Japan’s No. 6 carrier, IDC, a few months later. Also in 1999, Global Crossing teamed up with Marubeni to build an entirely new network, called Global Access, to service Japan. Wall Street highs and lows As M&A activity heated up, Wall Street took notice – investors poured $1.3 trillion into telecom industry companies in the five years following the Telecom Act’s passage, according to Forbes magazine. But with this activity came increased scrutiny and risk. Ultimately, the industry was subject to the same meltdown that hit the rest of the tech sector beginning in late 2000. According to Forbes, the industry’s market value plummeted by $1 trillion after the Dow Jones Visit Vault at www.vault.com for insider company profiles, expert advice, career message boards, expert resume reviews, the Vault Job Board and more.
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took its dive. Mergers also fell by the wayside. In July 2000, a proposed deal between Sprint and WorldCom fell through when the Justice Department filed a lawsuit that attempted to block the deal. The prospect of a lengthy DOJ suit effectively killed the merger, and it may similarly discourage future unions. Compounding the gloom in the industry, some major telecoms had high-profile problems in their accounting departments. The two biggest offenders were WorldCom and Global Crossing, both of which ran afoul of the feds in 2002. WorldCom filed for the largest bankruptcy in U.S. history in July 2002, racking up $41 billion in debts and an estimated $11 billion in fraudulent expenses – leading to a $100 billion loss to shareholders. Even as the company attempted a rebound, emerging from bankruptcy in April 2004 with a lighter debt load, a moderately healthy outlook, and a less tarnished name (the company reverted to the MCI brand), it had to contend with scores of class-action lawsuits; former chief executive Bernard J. Ebbers also faced a growing list of federal fraud and conspiracy charges as late as Spring 2004. Accounting firm Citigroup announced in May 2004 that it would pay $2.65 billion to investors for its role in the scandal. The turmoil led some industry analysts to speculate about a possible sale of MCI to one of its Baby Bell competitors; at presstime, both Verizon and Qwest were trying to purchase MCI. A debt burden of $12.4 billion, along with an oversupply of highspeed network capacity, led to Global Crossing’s Chapter 11 filing in January 2002. The outcome was predictable in this era of accounting scandals, including a Justice Department probe into the company’s accounting practices, and lawyers rounding up plaintiffs. In April 2004, investors again had reason to worry as Global Crossing announced it would need to review and restate its financial statements for all of 2002 and 2003 thanks to a $50 million to $80 million understatement of liability costs. In addition to WorldCom and Global Crossing, about a half-dozen other providers of telecom services began Chapter 11 bankruptcy proceedings in 2002, dumping customers and employees as they went.
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In September 2003, Sprint reorganized its services along business and consumer lines in an effort to save $1 billion. Wireless wins the day Thanks to the booming wireless market, however, Sprint, which offers wireless service under the Sprint PCS name, faces less market risk, analysts say. The same holds true for other major telecoms that have devoted resources to wireless services. In fact, the wireless market, with $89 billion in spending in 2003, outpaced long-distance for the first time that year, according to TIA research (LD posted $78 billion in spending). The number of wireless users was estimated at above 1 billion in 2003. The boom in wireless may herald renewed business activity in telecom. One notable example is Cingular’s $41 billion purchase of rival AT&T Wireless, announced in February 2004, following a fierce bidding battle with rival Vodafone. As an example of how complicated the industry’s family ties are, consider this: Cingular happens to be owned by rival Baby Bells BellSouth and SBC; competitor Verizon Wireless is a joint venture of Verizon and the Vodafone Group. Competition began to sizzle in late 2003, as the first phase of a federal law allowing “portability” – the ability of consumers to retain their phone numbers when switching carriers – took effect. Merger activity took off in late 2004 and early 2005. In December 2004, Sprint and Nextel announced a $35 billion merger agreement. And in early 2005, SBC announced it would acquire AT&T for $16 billion. Meanwhile, Verizon and Qwest were engaged in a bidding war for MCI that had not been resolved as of this book’s publication. An end-run around the phone Cell phones aren’t the only way consumers are making calls these days – Voice over Internet Protocol (VoIP), offered by companies like Vonage, allows users to turn their personal computers into telephones by sending voice “data” over a broadband connection in the same way Visit Vault at www.vault.com for insider company profiles, expert advice, career message boards, expert resume reviews, the Vault Job Board and more.
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Vault Guide to the Top Telecom Employers Introduction
other data is sent online. Bypassing questions of local and long distance networks entirely, VoIP services allow complete number portability – users in Iowa can maintain Manhattan area codes. The technology also has an advantage in terms of cost – thanks to the FCC, VoIP is exempt from taxes and regulations regular phone carriers are saddled with. Of course, the major telecoms are busy on Capitol Hill, trying to level the playing field – meanwhile, most experts say the technology has a way to go in terms of reliability and simplicity for the average consumer. But it isn’t a simple question of phone companies competing with the Internet – indeed, telecom providers, seeing the Internet revolution early on, began expanding their data communication networks, constructing more than 90 million miles of fiber-optic cables alone. Cable lines, which are hooked up to 90 percent of American residences, have considerably greater bandwidth than current phone lines and appear to be the least painful replacement for the outdated phone lines connecting homes today. With AT&T currently gobbling up miles of cable wire, there’s little mystery as to what its medium in the next few years will be. A job market roller coaster The numbers are intimidating: By some estimates, the telecom industry slashed 300,000 jobs during the troubled period beginning in late 2000. As recently as May 2004, MCI announced plans to lay off 7,500 workers – on top of 4,500 in cuts it had announced a few months prior to that. But outplacement firm Challenger Gray & Christmas sees the layoffs fading a bit – while more than 12,000 telecom workers lost their jobs in December 2002, that number was just over 8,700 in December of the following year. While employment prospects are expected to be limited in telecom for the time being, the U.S. Department of Labor’s Bureau of Labor Statistics (BLS) says that rising demand for services will eventually boost hiring.
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According to the BLS, telecom provided 1.2 million wage and salary jobs in 2002, the latest year for which statistics are available. Of these employees, just over half work in office and administrative support or in installation, maintenance and repair. Other positions in the industry include sales and IT-related functions like computer support, engineering and administration. Keeping job skills up-to-date is crucial in this rapidly changing industry, the BLS insists – many major employers offer training through web sites and other resources.
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TOP TELEC EMPL EMPLOYER PROFILES
ALLTEL Corporation 1 Allied Dr. Little Rock, AR 72202 Phone: (501) 905-8000 Fax: (501) 905-5444 www.alltel.com
LOCATIONS Little Rock, AR (HQ) Atlanta, GA Charlotte, NC Cleveland, OH Jacksonville, FL Little Rock, AR
DEPARTMENTS Accounting and Finance • Administration and Secretarial • Advertising and Public Relations • Applications Support • Banking • Business Processes/Analyst • College Recruiting • Computer Operations • Consulting and Professional Services • Customer Services • Education and Training • Engineering • Facility Services • Human Resources • Information Technology • New Media/Internet • Legal • Manufacturing and Production • Management • Marketing • Operations Production • Publishing/Printing • Quality Control • Sales • Technical Writing • Telecom/Datacom
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THE STATS Employer Type: Public Company Stock Symbol: AT Stock Exchange: NYSE President and CEO Scott T. Ford 2003 Employees: 19,986 2003 Revenue: $7,980
KEY COMPETITORS BellSouth SBC Communications Verizon
EMPLOYMENT CONTACT www.alltel.com/career
© 2005 Vault Inc.
Vault Guide to the Top Telecom Employers ALLTEL Corporation
THE SCOOP
An up and coming telco ALLTEL is a communications company with more than 12 million customers across the United States and as of the end of 2003, $8 billion in annual revenue. The company provides wireless, local telephone, long-distance, Internet and high-speed data services to individuals and businesses in a total of 26 states. ALLTEL also owns a series of subsidiaries that provide wireless and wireline local and long-distance and Internet services. But that’s not all. One subsidiary of the company publishes telephone directories, while another provides billing, customer service, data processing and outsourcing services to other telecommunications companies.
A quick history The company got its start when brothers-in-law Hugh Wilbourn and Charlie Miller of Little Rock, Ark., pooled their resources and bought the Grant County Telephone Company from W.R. “Witt” Stephens in the 1940s. Later in the decade, they would combine the assets of Allied Telephone in Arkansas and Mid-Continent Telephone in Ohio to create a regional telephone company that more closely resembles the company we know today. Over the ensuing decades, the company that would become ALLTEL set out on a bold course of acquisitions, buying up and merging with wireless companies in rural and small urban areas. As of early 2004, ALLTEL stands as the sixth largest U.S. wireless operator, with approximately 12 million customers. It’s interesting to note that the company has stayed true to its roots as a family-run company. Hugh Wilbourn, one of the company’s founders, is Joe Ford’s father-inlaw. (Ford was named CEO in 1987, having been the company’s COO since 1983.) In July 2002, Joe’s son, Scott Ford, who joined the company in 1996, was named president and CEO as part of a succession plan in which Joe Ford remained chairman of the board. From the company’s modest beginnings, it currently employs about 20,000 people across the United States.
ALLTEL’s acquisitive nature The company estimates that it’s conducted about 250 acquisitions over the past 50 years, but it’s in the last six years that the spectacular deals that have made the company what it is today have taken place. Things kind of kicked off with Visit Vault at www.vault.com for insider company profiles, expert advice, career message boards, expert resume reviews, the Vault Job Board and more.
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Vault Guide to the Top Telecom Employers ALLTEL Corporation
ALLTEL’s July 1998 acquisition of 360 Communications in a $6 billion merger, which increased ALLTEL’s wireless customer base from 941,000 to about 3.4 million in one fell swoop. The same month, ALLTEL acquired the assets of Cellular Plus, a wireless provider in Georgia. Just a few months later, in December 1998, ALLTEL again merged with another communications company – this time it was Aliant Communications – in a $2 billion deal. Less than a year later, in October 1999, ALLTEL completed a $600 million merger with Liberty Cellular. In the company’s first blockbuster deal of the new millennium, in March 2002, ALLTEL finally completed its purchase all of the wireless properties owned by CenturyTel Inc. for $1.7 billion. The move allowed ALLTEL to add another 800,000 customers and expand its wireless business into new markets across Arkansas, Louisiana, Michigan, Mississippi, Texas and Wisconsin. While the acquisition started on a sour note in mid-2000, with CenturyTel rejecting what it considered to be a hostile takeover attempt by ALLTEL to buy its wireless and wireline operations (for a hefty $6 billion), the two companies eventually agreed ALLTEL would buy only the wireless unit. After the deal was completed, ALLTEL walked away with a total of 7.4 million wireless customers in 24 states. Also included in the transaction are minority partnership interests in cellular operations of two million points of presence (also known as POPs, or potential customers), and licenses covering 1.3 million POPs in Wisconsin and Iowa.
A good year For 2003, total company revenue stood at $8 billion, a 12 percent increase from 2002. Net income for the year was $1.3 billion, which represented a 44 percent increase from the previous year. Breaking the numbers down across the company’s various business segments looks like this: Wireless revenue was $4.7 billion, a 14 percent increase from 2002; wireline revenue was $2.4 billion, a 12 percent increase from the previous year and the company more than doubled its DSL customer base in 2003, ending the year with more than 153,000 high-speed customers. But not all the news for the year was good. Although first quarter 2004 sales looked good – revenue increased by 3 percent, thanks in part to an increase in wireless subscribers – The Wall Street Journal reported that the company’s cost of doing business increased sharply, causing earnings to fall by 32 percent. At the time the company was announcing its positive yearly earnings report, it had some bad news for some of its employees. ALLTEL said that due to changes in its organizational structure, it was eliminating 600 positions on the regional and corporate levels. The company had previously laid off about 1,000 employees in February 2001, in the 12
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wake of weak sales for 2000 and because the company did not meet its goal for signing up new customers.
Legal issues In March 2004, ALLTEL filed a federal lawsuit against the state of Kentucky’s Public Service Commission, (PSC), challenging a provision of the 1996 Telecommunications Act which requires established phone companies to allow competitive carriers to use their networks at a discounted rate. The suit is challenging a December 2003 PSC order that required ALLTEL to sell to SouthEast, a carrier in 35 counties in Eastern and Central Kentucky with about 10,000 telephone subscribers. ALLTEL is arguing that it shouldn’t have to provide network services for SouthEast because the company already has its own switches. As of April, the PSC has rejected ALLTEL’s arguments, but the company’s fight continues.
Naming rights ALLTEL jumped into the trend of corporate-named sports arenas in August 1995 when the National Football League’s Jacksonville Jaguars moved into their new stadium, ALLTEL Stadium, a 76,877-seat facility in Jacksonville, Fla. (Ironically, the company announced in February 2004 that it will no longer offer local service in Jacksonville as of July 2004. The company had been providing service in the Jacksonville area since 1992.) In October 1999 the company christened ALLTEL Arena, an 18,000 seat multi-purpose facility in Little Rock, Ark. The arena is the home court for the University of Arkansas at Little Rock Trojans basketball and the Arkansas Twisters Arena Football team. The state of Arkansas contributed $20 million to the building of the facility, while ALLTEL contributed an additional $7 million for the naming rights of the arena.
GETTING HIRED
Hiring process The company offers a full range of information and job searching capabilities on its career site, alltel.com/career/index.html. Job hunters can search for open positions by job category, location or keyword and apply online. The company also lists a complete schedule of college recruiting events. In addition, ALLTEL offers internship programs and offers a breakdown of how the program operates at Visit Vault at www.vault.com for insider company profiles, expert advice, career message boards, expert resume reviews, the Vault Job Board and more.
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Vault Guide to the Top Telecom Employers ALLTEL Corporation
alltel.com/career/recruit/internships.html. Budding interns can apply online for open positions through the site as well. As of this writing, no college recruiting events were posted on the company’s web site. However, a note advises those interested in a future with ALLTEL to “check back” for a listing of upcoming events.
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AT&T One AT&T Way Bedminster, NJ 07921 Phone: (908) 221-2000 Fax: (908) 532-1675 www.att.com
LOCATIONS Bedminster, NJ (HQ) With offices across the U.S. and around the world
DEPARTMENTS Accounting Administrative Support Analyst Attorneys Auditing Budgeting CAD Graphics Communications Computers (Administration, Hardware, Programmer, Software) Customer Service Data Administration Data Warehousing Economics Engineering Science Finance Human Resources Information Systems Management Manufacturing Marketing Research and Development Sales Software Engineering Web Development
THE STATS Employer Type: Public Company Stock Symbol: T Stock Exchange: NYSE Chairman and CEO: David W. Dorman 2003 Employees: 61,600 2003 Revenue ($mil.): $34,529.0
KEY COMPETITORS Sprint MCI Verizon
EMPLOYMENT CONTACT www.att.com/hr/
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Vault Guide to the Top Telecom Employers AT&T
THE SCOOP
Overview AT&T may be known as the mother of all telephone companies. But in recent years, it’s been the mother of reinvention, too. After spending much of the 1990s expanding into new areas of the telecommunications industry, the company sold its cellular and cable businesses to focus on voice and data communications. After announcing a major business reshuffle in 2000, the company spun off AT&T Wireless in 2001. A year later, AT&T Broadband was sold to cable provider Comcast. To top it all off, the company announced in 2004 that it would stop pouring money into marketing the one service that was the backbone of its identity – residential service, particularly long-distance. But there’s plenty left for AT&T to sell to consumers and small businesses alike: local and long-distance telephone plans, DSL or dial-up Internet service. It also offers data, web hosting, virtual private network (VPN) management, video conferencing and other services for large-scale operations like governments, wholesalers and other big businesses. It’s services like these that will likely be the wave of the future for one of the oldest telephone companies in the country.
Telegraphic traffic The history of AT&T is essentially the history of the telephone itself. After winning patents for his “talking telegraph” invention, Alexander Graham Bell founded the Bell Telephone Company with Gardiner Hubbard and Thomas Sanders, two financiers who had bankrolled Bell’s research. The American Telephone and Telegraph Company was incorporated in 1885 as a wholly owned subsidiary of Bell Telephone and began to build the first long-distance phone network. By 1915, the network spanned the continent from New York to San Francisco. When Bell’s patents expired, thousands of new telephone companies sprang up. While the result was massive growth in the availability of phone service, it also created a jumbled mess of incompatible networks. In response, AT&T was granted a legal monopoly on domestic long-distance service in exchange for agreeing to connect the various local phone companies to its network and divesting itself of the Western Union telegraph company. The Bell System, as it came to be known, was successful in eventually wiring the country; by the middle of the 20th century,
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Vault Guide to the Top Telecom Employers AT&T
telephone access was approaching 100 percent. Yet the relationship between the monopolist and its regulators was frequently an uneasy one.
Ma Bell starts a family After a close scrape with the law in a 1949 antitrust lawsuit, as well as the introduction of long-distance competition in 1969, the Bell System once again became the subject of regulatory scrutiny in 1974. After years of legal haggling, the suit was finally settled in 1982 when AT&T agreed to sell off its holdings, creating seven regional phone companies that would provide local service within their respective regions. AT&T kept its long-distance service and telephone equipment manufacturing businesses, allowing the “Baby Bell” companies to operate those local telephone exchanges as independent companies. The regulators reasoned that while monopoly protection was still warranted at the local level, competition for AT&T would both benefit consumers and stimulate innovation. (January 2005 marked a family reunion for AT&T and one of its former Baby Bells. That month, SBC announced an agreement in which SBC will acquire AT&T. The transaction combines AT&T’s global systems capabilities, corporate and government business, and Internet protocol (IP)-based business with SBC’s local exchange, broadband and wireless solutions.) Overnight, AT&T was transformed. The long-distance business became fiercely competitive, with rivals MCI and Sprint steadily eroding AT&T’s market share. Yet while prices fell, volume exploded. The increased demand for data communications helped keep AT&T financially strong. The company began a series of high-profile acquisitions, buying computer manufacturer NCR for $7.3 billion in 1991 and McCaw Cellular for $11.5 billion in 1994. McCaw, the largest cellular provider at the time, would be renamed AT&T Wireless.
Breakup #2 AT&T’s second massive restructuring was announced in 1995. This time, however, it was voluntary. First, AT&T’s telecom equipment business and the famed Bell Laboratories research organization were packaged together to form a new company, Lucent Technologies, in 1996. Meanwhile, the NCR deal, for which AT&T had such high hopes, had not panned out, and in 1997 it too was cut loose. Refocused solely on telecommunications services, AT&T began to diversify its offerings. When the Telecommunications Act of 1996 allowed competition in local telephone service for the first time, AT&T reentered the local market, becoming a competitor to its Baby Visit Vault at www.vault.com for insider company profiles, expert advice, career message boards, expert resume reviews, the Vault Job Board and more.
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Bell offspring. The company also introduced its WorldNet Internet service and began offering PCS cellular service through its wireless division.
Armstrong tactics Michael Armstrong took the helm as CEO of AT&T in 1997. Recognizing that longdistance voice service was likely to decline in the years ahead, Armstrong pushed AT&T further into new business areas. He engineered the purchase of IBM Global Network to bolster the company’s position in the data networking market. Next came the acquisitions of cable companies TCI and MediaOne. The new cable holdings were dubbed AT&T Broadband and constituted the largest cable company in the U.S. The wax and wane of AT&T’s holdings was reaching a third peak, only to result in another divestiture and restructuring. In 2000, the company announced yet another redo. Breakup No. 3 meant reorganization into a “family” of companies. It did this by spinning off AT&T Wireless in July 2001 and by merging AT&T Broadband with cable giant Comcast in November 2002. When the AT&T Broadband/Comcast deal was completed, Armstrong stepped down as CEO and was succeeded by David Dorman. The Business Services and Consumer Services units, as well as AT&T Alascom, a network serving much of rural Alaska, spanning 367 acres of the last frontier, remained under the AT&T Corporation umbrella.
Clouds on the horizon This third round of restructuring was widely viewed as a way to shield the more profitable and dynamic cellular and cable businesses from the expected decreasing returns associated with consumer phone services. Not surprisingly, AT&T’s stock began to slump. Despite Armstrong’s flamboyant wheeling and dealing, AT&T ended up selling its cable assets at a $60 billion loss.
Dawn of the Dorman era The company placed its faith in Armstrong’s successor, David Dorman, who first joined AT&T as its president in December of 2000 after having spent his entire career in the telecommunications industry. Prior to joining AT&T, he was CEO at Concert, the failed AT&T/British Telecom (BT) joint venture. Concert, which sold telecom services to multinational corporations, was disbanded in 2002 after disappointing both partners with its inability to turn a profit. Before that, Dorman had served as the CEO of Pacific Bell until its purchase by fellow Baby Bell SBC Communications in
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Vault Guide to the Top Telecom Employers AT&T
1997. Dorman began his career in the early 1980s with the then-upstart long-distance company, Sprint. Industry insiders portray Dorman as cool and levelheaded. Some of his early moves included investing in Internet and automation technologies to improve efficiency. In January 2003, Dorman moved to shore up AT&T’s financial position by repurchasing $4.3 billion worth of the company’s outstanding debt.
Contracts galore The first half of 2003 saw AT&T land a number of major new corporate and government contracts. In March, the company entered into a five-year deal with the Internal Revenue Service, worth an estimated $180 million, to provide toll-free and call center services. April saw Kodak selecting AT&T to provide network management, monitoring, and maintenance services for all of Kodak’s web applications. And in May, the Finnish airline Finnair awarded the company a contract worth about $5.6 million to set up and manage a global wide-area network (commonly known as a WAN). At AT&T Business Services, business was booming.
Down with advertising But in homes across the U.S., AT&T has been losing ground. Because of the increasing use of cell phones and the Internet, the future of long-distance service as we know it is uncertain. Some were forecasting a decline by as much as 20 percent a year on consumer long-distance revenue. The venerable telecom giant made a telling move in July 2004, when it announced that it would stop spending money on marketing and advertising in seven states on residential services like local and longdistance, on which it had based its corporate identity almost since its inception. A federal court ruling that month had struck down long-distance carriers’ ability to lease local telephone lines at discounted rates. AT&T said that move would make it more costly to provide local services to its 35 million residential customers, so it decided to cut the fat. Then in August 2004, the company followed up its declaration to stop marketing residential services with an announcement that it would raise rates for residential customers in 40 states who use the company for local service.
Goodbye, old friend And that’s probably only the beginning. All of AT&T’s residential services may be on the wane. At first, the company hoped that an increase in sales of local/longdistance service “bundles” could offset some of the revenue declines. But now, Visit Vault at www.vault.com for insider company profiles, expert advice, career message boards, expert resume reviews, the Vault Job Board and more.
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Vault Guide to the Top Telecom Employers AT&T
having abandoned new residential customers to its competitors, most analysts think the service is only a couple years away from disappearing from AT&T’s roster altogether, though the company denies that it’s quitting the field. Still, a month later – when the company’s second quarter net earnings dropped 80 percent and its stock earned “junk” status from Fitch Ratings – it announced that it would stop marketing residential services altogether, at a savings of about $500 million. The new focus would be on business services, which make up almost threequarters of its revenue. Some observers thought the move spelled trouble. “We’ve just demolished the most successful models of competition,” said the co-director of Consumers Union, which publishes Consumer Reports, in a Los Angeles Times article. “For the vast majority of phone users, this is moving us back to the world of monopolies.”
Down to business You can’t blame AT&T for homing in on its most profitable segment. Contracts continued to flood into the business unit, like a $5.4 million contract with Bombay Company, a broadening of its agreement with Hilton Hotels in a new $67.5 million contract, or its $7 million, three-year deal with Deere & Co., all signed in the first half of 2004. The unit aspires to be a one-stop shop for fulfilling all the communications service needs of both small businesses and large corporations. In voice communications, AT&T Business offers domestic and international long distance, local service, tollfree numbers, and call routing for sales and customer service call centers. In data, the company offers a full range of services from basic DSL Internet access and small business hosting packages all the way up to managed global network services, VPNs, video and audio conferencing, and wholesale network transport capacity. The business services division also offers products specially tailored to the needs of government agencies through AT&T Government Solutions. The Departments of Treasury, State, Energy and Justice are among AT&T’s government clients.
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Vault Guide to the Top Telecom Employers AT&T
GETTING HIRED
Hiring process overview The AT&T web site offers a searchable database of all of the company’s available positions. At www.att.com/hr, applicants can create a personal profile, enabling them to receive e-mail alerts when a job matching their interests becomes available. Creating a profile also speeds up the process of applying to multiple positions, though job seekers who are just browsing can also search the company’s postings without registering. On its intranet, the company also posts positions that are open only to current employees. AT&T makes recruiting visits to college campuses such as Georgia Tech, MIT, Stanford, Columbia, UC-Berkeley, and Chicago during the academic year. Students with degrees in computer science, electrical engineering, computer engineering, finance, business, marketing, and mathematics are particularly in demand. Another major source of entry-level recruiting is AT&T’s summer internship program. The company likes to “invite high achievers back for future internships and possible fulltime employment following graduation.” All AT&T interns have the opportunity to participate in professional development activities such as training courses, meetings with senior management and networking events. In addition to their standard summer internship program, AT&T also offers a specialized summer program in finance, longer-term co-op positions and a range of research-oriented internship and fellowship positions at AT&T Labs.
Benefits AT&T says it believes in helping employees “find ways to balance the demands of work with your personal life.” The company’s workers enjoy a standard benefits package that includes medical, dental, and drug coverage, and an employee stock purchase plan. Additional company perks provide employees with discounts on AT&T products and services, health club membership, access to the company’s federal credit union, a tuition assistance plan and even pet care insurance. AT&T’s family-oriented perks include an adoption reimbursement plan, domestic partner benefits, and time off to care for a new child.
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BellSouth Corp. 1155 Peachtree Street, NE Atlanta, GA 30309-3610 Phone: (404) 249-2000 Fax: (404) 249-2071 www.bellsouth.com
THE STATS
Atlanta, GA (HQ)
Employer Type: Public Company Stock Symbol: BLS Stock Exchange: NYSE Chairman, President, and CEO: F. Duane Ackerman 2004 Employees: 63,000 2002 Revenue ($ mil.): $20,300
DEPARTMENTS
KEY COMPETITORS
Marketing Sales Telecommunications
ALLTEL AT&T ITC^DeltaCom
LOCATION
EMPLOYMENT CONTACT www.bellsouth.com/employment/ car_hom.htm
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Vault Guide to the Top Telecom Employers BellSouth Corp.
THE SCOOP
One of the Baby Bells BellSouth is the third largest of the original Baby Bells (after Verizon and SBC). The Atlanta-based company offers voice, data and Internet services to almost 46 million customers in the U.S. and 13 foreign countries, mostly in Latin America and Europe. It also owns 40 percent of Cingular Wireless, the second largest wireless company in the U.S. The company offers DSL high-speed Internet access and provides online and directory advertising services.
A history lesson BellSouth can trace its roots back to 1878, when Theodore Vail, general manager of National Bell, hired James Merrill Ormes to market Alexander Graham Bell’s revolutionary telephone throughout the South. In those early days, competition was surprisingly fierce, especially from rival Western Union. Ormes, however, managed to bring Western Union to the negotiating table, and Southern Bell Telephone and Telegraph was born. Through a steady program of buy-outs and mergers, the company managed to extend its market dominance throughout the South. In 1968, it divided into two separate units: Southern Bell and South Central Bell. Fourteen years later, when antitrust regulators split AT&T into seven regional holding companies or “Baby Bells,” the two companies reunited. The new entity, known as BellSouth, was at that point the largest Baby Bell.
The formative years Throughout the 1980s and 1990s BellSouth expanded its services, mostly by acquiring cellular and paging companies, as it did in 1991 when it bought 18 cellular systems from McCaw Cellular. In 1995, the company invested heavily in the personal communication service (PCS) standard for mobile services when it bid $47.5 billion in an FCC auction of the broadband radio spectrum. Two years later, with Duane Ackerman as CEO, the company began to expand abroad, especially in Latin America.
A Cingular sensation In October 2000, BellSouth combined its wireless phone operations with those of SBC Communications, to create Cingular Wireless, the second-largest wireless Visit Vault at www.vault.com for insider company profiles, expert advice, career message boards, expert resume reviews, the Vault Job Board and more.
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Vault Guide to the Top Telecom Employers BellSouth Corp.
company in the U.S. BellSouth owns 40 percent of the venture, while SBC owns the remaining 60 percent. As of 2005, Cingular Wireless had 50 million customers. In mid-2002 Cingular moved into the New York City market thanks to a joint venture with T-Mobile (then known as VoiceStream) that lets it compete in the coveted market without having to build its own network.
Broadband and data Broadband services are a major growth area for BellSouth. The company is one of the fastest growing Internet service providers in the Southeast with over two million customers at the end of 2004. For the full year 2003, revenues at the company increased 0.9 percent to $22.6 billion, while income rose to $3.9 billion from $1.3 billion the previous year.
Repositioning In keeping with BellSouth’s stated desire to concentrate its wireless business in the North American market, in March 2004, the company announced an agreement to sell its interests in its 10 Latin American operations to Telefonica Moviles, the wireless affiliate of Telefonica, S.A. for $5.8 billion in cash. According to a report on CBSMarketWatch.com, some analysts thought that BellSouth could have sold its operations for upward of $7 billion, but BellSouth seemed to want to sell the assets off quickly, leading to the lower sale price. While the Latin American market once looked to be a high-growth market for wireless services, the area has grown sluggish in recent years. In Latin America, BellSouth’s customer base has been concentrated in Venezuela, Colombia, Argentina and Chile, and the company’s Latin American assets generated $2.3 billion in sales and $696 million in operating cash flow in 2003.
A good deal? The extra cash generated by the Latin American sale will help BellSouth pay for its portion of the February 2004 acquisition of AT&T Wireless. BellSouth and SBC Communications’ jointly owned mobile division, Cingular Wireless, agreed to buy AT&T Wireless for $41 billion. When the AT&T deal was struck, BellSouth said that it expected to borrow up to $10.5 billion to pay for its share of the takeover. BellSouth also said that it expects to contribute about $16 billion to the buyout. Although the original asking price for AT&T Wireless was about $30 billion,
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Cingular was forced to pay more after a bidding war with Vodafone erupted, with each side upping their offers until Vodafone dropped out. The AT&T Wireless deal comes with plenty of risks for the joint venture, with reports stating that the company may be losing as many as 150,000 subscribers a month now that cell phone users are free to change service providers without losing their phone numbers. During the third quarter of 2003, AT&T Wireless was losing an average of about 600,000 customers a month, but was still managing to sign up enough new subscribers to show a gain of 229,000 for the period. As if that wasn’t bad enough, the losses grew to more than 700,000 per month in the fourth quarter, but the company still showed an overall gain of 128,000 customers for the quarter. The new year wasn’t much better for AT&T, with some Wall Street analysts estimating that customer losses at AT&T Wireless may hit an average of 750,000 a month for the first quarter. Although AT&T has been busy upgrading service across the country in an effort to stem the customer exodus, it’s still unclear if the company can cut losses while adding enough new customers to make the acquisition pay off. Cingular, for its part, has been adding more than 500,000 customers a quarter for the past three quarters, one of the strongest growth rates in the industry. The question remains, however, if a new management team can bring AT&T back to life. In addition to this deal, in February 2004, Cingular announced that it had acquired about 16,000 new customers in Louisiana as part of a $28 million buyout deal with U.S. Unwired Inc.
GETTING HIRED
Hiring process BellSouth posts employment information for four different divisions – BellSouth Telecommunications, BellSouth.net, BellSouth Mobility and BellSouth International – on its employment web page, located at www.bellsouth.com. Each of these divisions lists job openings in a variety of departments and provides information on how to submit a resume. Potential applicants should go through the listings of each division carefully; similar positions (in technology, finance and sales, for example) are posted in each. The web pages list both e-mail and regular mail addresses, which vary from position to position. When applying, be sure to include the job posting number included on the web site. Most jobs are listed on the site are at the corporate headquarters in Atlanta; however, there are some opportunities available at other Visit Vault at www.vault.com for insider company profiles, expert advice, career message boards, expert resume reviews, the Vault Job Board and more.
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Vault Guide to the Top Telecom Employers BellSouth Corp.
locations. The company also gives details regarding internship opportunities and the academic requirements on the site.
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Charter Communications 12405 Powerscourt Dr. Suite 100 St. Louis, MO 63131-3660 Phone: (314) 965-0555 Fax: (314) 965-9745 www.charter.com
LOCATION St. Louis, MO (HQ)
THE STATS Employer Type: Public Company Stock Symbol: CHTR Stock Exchange: NASDAQ CEO: Carl E. Vogel 2004 Employees: 15,500 2004 Revenue ($ mil.): $4,977
KEY COMPETITORS Comcast Cox Communications Time Warner Cable
EMPLOYMENT CONTACT www.charter.com/aboutus/careers/ careers.aspx
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Vault Guide to the Top Telecom Employers Charter Communications
THE SCOOP
Allen’s “Wired World” Paul Allen’s Charter Communications is a cable system operator that serves 6.4 million subscribers across the U.S. Not content with being just one of the top cable TV operators, it also offers digital cable and broadband Internet access. Charter teams with companies such as Wink and WorldGate to provide interactive TV services. Microsoft co-founder Allen owns 55 percent of the company. Allen took over Marcus Cable in April 1998, and swiftly moved to acquire Charter Communications for $4.5 billion that July. The purchase created the seventh-largest cable operator in the nation, with a combined 2.5 million subscribers. Marcus Cable founder Jeffrey Marcus remained as chairman of the new company, which set up corporate headquarters in St. Louis, Mo. After the deal was announced, Allen said in a statement, “This investment marks another step forward in my ‘Wired World’ strategy, which is a connected future market by the merger of high-bandwidth data channels, the power of the personal computer and the availability of valuable content.”
Shopping spree Charter went on a spending tear in 1999, snapping up Los Angeles-based Falcon Communications L.P. for $3.6 billion, regional television operator Avalon Television for $845 million, New York-based Bresnan Communications L.P. for $3.1 billion and Denver-based cable operator Fanch Communications for $2 billion. Allen also invested $300 million into Go2Net Inc., a community web site operator. The deals opened Charter’s market reach in New York, California, the Pacific Northwest, West Virginia, Pennsylvania, Missouri and North Carolina. Charter announced plans to go public in July 1999 with an initial public offering of $3.45 billion. The IPO served two purposes: to generate more money for Charter to enhance its infrastructure and to raise funds for additional acquisitions, such as the February 2001 purchase of cable systems from AT&T Broadband for $1.79 billion. That deal netted Charter an additional 512,000 subscribers and made Charter the nation’s No.-4 cable operator with a total base of 6.4 million customers. Charter advanced into small-to-medium subscriber areas and suburbs of larger cities, instead of attempting to infiltrate larger urban areas. Charter also took an early interest in the potential of broadband and cable technology and the bundling of 28
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Vault Guide to the Top Telecom Employers Charter Communications
phone, Internet and other communications services as long-term business ventures, while its competitors built up local phone markets that resulted in short-term gains. In 2000, Charter announced plans to accelerate by one year a $3.5 billion rebuilding and upgrade program that included adding digital video capabilities and high-speed Internet access. The company had initially set a goal of 10,000 new Charter cable customers per week in 2000, but was adding as many as 24,000 new digital customers weekly by mid-year.
Subscriber scandal By May 2002, analysts were predicting huge things from the St. Louis-based company, suggesting it would be a dominant player in the broadband industry in the coming years. Anthony Gikas, a senior analyst for U.S. Bancorp Piper Jaffray, reported, “We anticipate Charter will continue to push the technology envelope and lead” in the expansion of video and residential high-speed data service. Within a few months of Gikas’ positive prediction, however, Charter took a turn for the worse. In August 2002, federal prosecutors announced an investigation of Charter’s expense accounting practices, primarily focusing on how the company accounted for costs related to current and former cable subscribers. Charter officials expressed their intent to cooperate fully in the investigation. A dozen firms filed class-action lawsuits against Charter in 2002, alleging violations of securities laws. The company fired COO David Barford and CFO Kent Kalkwarf that December. David McCall, Charter’s former senior vice president of operations for the company’s eastern division, plead guilty to conspiracy to commit wire fraud charges in July 2003. McCall was one of four former Charter executives arraigned on 14 corporate fraud allegations relating to plots to defraud investors in 2000 and 2001. McCall was indicted on one count of conspiracy to commit wire fraud; Barford and Kalkwarf were indicted by a federal grand jury on 14 counts of mail fraud, wire fraud and conspiracy to commit wire fraud; and former senior vice president James Smith was indicted on eight counts of wire fraud and conspiracy. U.S. Attorney Ray Gruender said Kalkwarf and Barford artificially inflated revenue and cash flow numbers and created fictitious subscribers, in a scheme that caused Charter to falsely include more than $17 million as revenue and cash flow for the fiscal year 2000. In a statement following the indictments, Charter said it had executed an internal review of its business practices, put a new management structure in place and implemented a company-wide compliance program.
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Vault Guide to the Top Telecom Employers Charter Communications
No rest from the SEC In July 2004, the Securities and Exchange Commission (SEC) ended an inquiry into Charter’s accounting practices. A month later, in August 2004, Charter agreed to a $144 million settlement of shareholder lawsuits over accounting practices; this came a week after settling with the SEC over how it had counted subscribers. Although Charter did not admit to wrongdoing, it agreed not to violate securities laws. The same month, Charter’s CFO Michael P. Huseby, resigned after having spent less than nine months on the job.
Restructuring and refocusing Despite the ongoing litigation, some heavy hitters took an interest in Charter during that turbulent time. Mark Cuban, a self-made billionaire who starred in the ABC “reality” show The Benefactor, increased his investment in Charter in May 2003 to 6.5 percent, even as the company struggled to with a multi-billion dollar debt and speculations of bankruptcy. In the fall of 2003, Charter launched a plan to sell off “geographically non-strategic assets.” In October, Charter sold a 25,500-subscriber Port Orchard, Wash., cable system for $91 million, and followed up that December by selling its East Coast cable system to Atlantic Broadband for $765 million. A May 2004 $8 billion debt restructuring maneuver allowed Charter to prevent a liquidity crisis and attain positive cash flow for the 2004 fiscal year. After posting two consecutive fiscal-year losses of $2.5 billion and $238 million, in 2002 and 2003 respectively, the company was able to stabilize costs and increase revenue cash flow. On a more positive note, Charter increased high-speed data revenue by 65 percent in 2003 from the previous year and increased its customer base by 39 percent. That May, Norwalk, Conn.-based GE Commercial Finance committed $284 million in financing to Charter, as part of Charter’s $6.8 billion plan to restructure and consolidate existing debt.
Always an innovator In January 2004, Charter became the first multi-system cable operator to launch an all-digital network. The Long Beach, Calif., system employs a hybrid fiber-coaxial network in place of an analog system to allow concurrent delivery of basic analog cable programming. According to Charter, the conversion from analog to digital helps recover valuable bandwidth capacity and saves money by using digital-only set -top boxes, which cost up to 50 percent less than similar analog/digital set-top boxes. The next month, Digeo Inc. and OpenTV made their interactive television service
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available to over 1 million of Charter’s digital cable customers, the largest deployment of cable interactive TV in North America.
Other legal battles A Newport Beach, Calif.-based unit of the Acacia Research Corp. accused Charter and eight other cable and satellite companies of patent infringement in a June 2004 lawsuit alleging the companies infringed on patents covering the technology used to power video-on-demand services and video streaming over the Internet. That August, Charter won a patent dispute in which Northbrook, Ill.-based Broadcast Innovation and West Perth, Australia-based IO Research claimed Charter infringed on a patent related to sending data over television broadcasts.
Staging a turnaround In August 2004, Charter brokered deals with Sprint Corp. and Level 3 Communications that would enable Charter to provide local and long-distance phone service to customers in some of its markets. Charter also announced that it had tapped Accenture to provide customer service and customer acquisition support. The company had about 31,000 phone customers as of October 2004, and was in the process of making the service available to more subscribers. The company also added 108,500 high-speed Internet customers, but lost 58,600 analog video subscribers, lured away by programming offers from rival operators. That was actually not a huge loss, though, as most of the subscribers who defected were low-impact customers. To retain and increase its number of high-impact subscribers, Charter unveiled plans to invest more in customer service and launch new products, including high-definition television and a telephone service that uses Internet technology. As of October 2004, Charter had around 1.5 million Internet subscribers. The company’s Internet business helped boost revenue up to $1.25 billion for the third quarter of 2004.
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Vault Guide to the Top Telecom Employers Charter Communications
GETTING HIRED
Take pride in your job and get free cable Charter’s company culture is based on nine values: integrity, creativity, work hard/play hard, customer service, positive attitude, pride, knowledge and skills, corporate citizenship and concern for others. The company describes itself as “a unique group of hardworking people who take pride in the work we do.” Jobseekers can search Charter’s online database of available jobs on the company web site and sign up to receive a “job alert” when a new position the applicant’s criteria is posted. The company provides paid time off and medical, dental and vision coverage. In addition, Charter allows employees to enroll in the company’s 401(k) plan after two months of service and provides a 50 percent match on the first 5 percent that the employee contributes. Most of exciting of all, employees who live within Charter’s service areas are eligible to receive free cable service.
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Cingular Wireless Glenridge Highlands Two 5565 Glenridge Connector Atlanta, GA 30342 Phone: (404) 236-6000 Fax: (404) 236-6005 www.cingular.com
LOCATION
THE STATS Employer Type: Joint venture of BellSouth and SBC President and CEO: Stanley T. (Stan) Sigman 2004 Employees: 70,300 2004 Revenue ($mil.): $19,436
Atlanta, GA (HQ)
KEY COMPETITORS
DEPARTMENTS
Sprint PCS Verizon Wireless
Accounting Sales
EMPLOYMENT CONTACT www.cingular.com/about/careers_ poss
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Vault Guide to the Top Telecom Employers Cingular Wireless
THE SCOOP
From two, a singular company Cingular was created in April 2000 as a joint venture between the domestic wireless divisions of communications providers SBC and BellSouth, with SBC owning 60 percent share of the company and BellSouth owning the other 40 percent. Cingular currently has more than 50 million voice and data customers across the United States, and is a leader in mobile voice and data communications. The company focuses on providing cellular/PCS service in 43 of the top 50 markets nationwide, and provides corporate e-mail and other data services through its GPRS, EDGE and Mobitex packet data networks.
Big buy In February 2004, Cingular announced a major step forward in its range and size. By signing an agreement to acquire AT&T Wireless for $41 billion, Cingular has created the largest wireless carrier in the United States, rocketing past Verizon Wireless to the No.-1 slot. The company now boasts one of the most advanced digital networks in the U.S., with wireless spectrum in 49 states and coverage in 97 of the top 100 markets. At the time of the announcement, Cingular said that the combined 2003 annual revenue of the two companies would have been more than $32 billion, which is a big jump from Cingular’s $15 billion 2003 revenue. Cingular’s parent companies, SBC Communications and BellSouth, each committed funding to Cingular to get the deal done. SBC shelled out approximately $25 billion, while BellSouth provided $16 billion for the acquisition. With 22 million subscribers as of the end of 2003, and revenue of more than $16 billion over the past four quarters, the acquisition of AT&T Wireless represents a major coup for Cingular. But this merger won’t be the companies’ first collaboration. In March 2003, the two entered into a joint venture to build out a GSM/GPRS (global system for mobile communications/general packet radio service) offering, targeting more than 4,000 miles of rural highways in the continental United States. The agreement entailed the building of GSM/GPRS networks along major highways in Vermont and New Hampshire as well as roadways in Upstate New York, Arizona, Colorado, Kansas, Minnesota, New Mexico, Nebraska, Oklahoma, Texas, and Utah.
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Vault Guide to the Top Telecom Employers Cingular Wireless
Trouble at AT&T Although Cingular remained committed to the deal to acquire AT&T Wireless, AT&T experienced some rough times, which brought the asking price down a bit. While a lower price could be considered a break for Cingular, it also means that Cingular has its work cut out for it. In April 2004, AT&T Wireless reported that it had lost subscribers during the first three months of the year, and disclosed another loss, in its all-important profit margin. AT&T said that it had a first-quarter loss of $58 million on sales of $4.1 billion. Media reports said that analysts had expected the company to be close to break-even for the quarter. In comparison to the first quarter of 2003, the company had a profit of $135 million from sales of $3.95 billion. The firstquarter loss marked the company’s second in a row. In the fourth quarter 2003, AT&T Wireless reported a loss of $84 million and sales of $4.2 billion. In more bad news, the company also confessed that it lost 367,000 customers during the first quarter, (while Cingular picked up 554,000 new subscribers), the first time its total subscriber count (currently at 22 million) has declined. The net loss in subscribers came despite having signed more than 2 million new customers during the quarter, making for a pretty high turnover rate.
Trying to right the ship In spite of these difficulties, AT&T Wireless reported in April that it plans to open 100 new retail stores and increase staffing at its overrun customer call centers (which at one point generated so many complaints they drew public criticism from the Federal Communications Commission). AT&T Wireless faulted the quarter’s dismal results on several problems dating back to November 2003. The company was dealing with a steep increase in the number of customers whose contracts were nearly up but hadn’t been renewed, and at the same time, new federal rules went into effect that let cell phone customers switch carriers and keep their old telephone number, spelling trouble for AT&T.
More pickups Beside the AT&T acquisition, Cingular has also been pretty busy growing the company in other ways, as well. In April 2004, the company said that it had closed the $1.4 billion acquisition of 34 licenses from NextWave Telecom Inc. With the exception of seven markets – Portland, Ore.; Salt Lake City; El Paso, Texas; Manchester, N.H., Hagerstown and Salisbury, Md.; and Kankakee, Ill. – the licenses are for areas where the company provides voice and data services.
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Vault Guide to the Top Telecom Employers Cingular Wireless
Cingular first began an aggressive expansion plan in 2002, when it announced a $945 million plan to upgrade its existing service, and provide new services, in western states, including Nevada, California, Washington, Northern Idaho and Hawaii. That investment was part of the company’s previously announced plan to spend $5.8 billion in capital expenditures during 2002 to improve its nationwide network.
Going public? In December 2003, rumors started swirling that Cingular was exploring the possibility of an initial public offering some time in 2004 to help fund its expansion plans. Despite some high-profile write-ups in publications such as The Wall Street Journal, no plans have been made public.
GETTING HIRED
Hiring process The company maintains a career site at www.cingular.com/about/careers, where interested parties can search for open positions based on location, function, level of experience, and other factors. Candidates who find appealing opportunities can apply online. The company also lists different career fields on the site, with employee testimonials and more information on the day-to-day life at Cingular.
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Cisco Systems, Inc. 170 W. Tasman Drive San Jose, CA 95134-1706 Phone: (408) 526-4000 Fax: (408) 526-4100 www.cisco.com
LOCATIONS San Jose, CA (HQ) Bangalore Bucharest Moscow North Sydney San Jose Tokyo
DEPARTMENTS Engineering Finance Management Sales
THE STATS Employer Type: Public Company Stock Symbol: CSCO Stock Exchange: NASDAQ President, CEO and Director: John T. Chambers 2004 Employees: 34,000 2004 Revenue ($ mil.): $22,045
KEY COMPETITORS Extreme Networks Jupiter Networks Nortel Networks
EMPLOYMENT CONTACT Human Resources Phone: (800) 818-9201 E-mail:
[email protected] www.cisco.com/jobs
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Vault Guide to the Top Telecom Employers Cisco Systems, Inc.
THE SCOOP
Changing fortunes Cisco Systems was one of the brightest stars of the 1990s tech bubble. At its peak, the company was, briefly, the most valuable in the world with a market capitalization exceeding both Microsoft and General Electric. Cisco’s fortunes have since taken a tumble from those lofty heights of early 2000. Yet the company remains a dominant player in networking with a 69 percent share of the switch market and 85 percent of the router market, and has recently mounted an impressive comeback.
Switched on Cisco is the leading manufacturer of networking hardware such as routers, switches, and hubs. These devices constitute what is often called the “backbone” of the Internet. Switches and hubs are used to connect computers to each other, creating local area networks (LANs). Routers connect one network to another; for example, they can link a LAN to a wide-area network (WAN) such as the Internet. Cisco also develops and sells the software used to manage these networks. The company’s primary customers are large corporations, educational institutions, government agencies, and telecom service providers who deploy large and complex networks. However, with its acquisition of Linksys in March 2003, the company is now poised to enter the small business and home networking markets as well. Cisco has also been one of the pioneers of Internet protocol (IP) telephony technology. Traditional voice networks transmit analog voice signals over a dedicated, circuit-switched connection. With IP telephony, the voice signal is digitized and transmitted as data packets using the same method (IP) that computers use to communicate with each other. The company’s vision is to eliminate the need for separate voice, data, and video infrastructures and replace them with a single multi-purpose network using IP technology. Industry analysts predict that by 2010 the majority of large corporate networks will be employing IP telephony technology.
Cisco vs. Stanford The history of Cisco Systems is a legendary piece of Silicon Valley lore, infused with drama, conflict, and a bit of myth. In the early 1980s, Leonard Bosack and Sandy Lerner were part of a team of computer engineers at Stanford University looking for a way to connect the separate and incompatible computer networks scattered around
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campus. The result of their research was an early prototype of the multi-protocol router. In 1984, Bosack and Lerner founded Cisco Systems out of their home to commercialize the technology. The fledgling company had no investors, and so Bosack and Lerner used their credit cards for financing. They continued to work at Stanford, refining their product largely with the university’s time and resources, and drawing on the expertise and work of other Stanford computer scientists. As a result, Bosack and Lerner soon became embroiled in a contentious battle over ownership rights to the new technology. Finally, in 1987, Stanford relented and agreed to license the technology to Cisco in exchange for $19,300 in cash, $150,000 in future royalties, and discounts on equipment purchases. It would prove to be quite a favorable deal for the new company.
Culture clash Bosack and Lerner’s Cisco Systems took off, and the company was quickly earning hundreds of thousands of dollars each month with no professional sales or marketing staff. The founders eventually decided to seek help in growing the company and attracted the interest of Sequoia Capital, a Silicon Valley venture capital investment firm. The venture capitalists provided financing and experienced corporate managers to help Cisco mature. John Morgridge was chosen lead the company as CEO, and became, in effect, Bosack and Lerner’s boss. Relations among the three were tense from the start. The company went public in 1990, and became something of a Wall Street darling, attracting attention as the newest hot technology stock. Bosack and Lerner, however, were becoming increasingly disillusioned with the corporate atmosphere of their company. On August 28, 1990, matters finally came to a head. Cisco’s seven vice-presidents met with Morgridge, demanding Lerner’s resignation. The two founders quit the company and sold off their stake that same day, netting about $170 million.
Appetite for acquisition Throughout the 1990s, Cisco Systems used its soaring stock price to finance the acquisition of dozens of smaller start-ups. Rather than invest heavily in research and development itself, the company’s strategy was instead to allow others to innovate and then purchase those start-ups with promising technologies. The shopping spree began with the purchase of Crescendo Communications in 1993, and reached its own crescendo in 2000 when Cisco bought out 23 of its competitors in a single year. In this manner, Cisco was able to buy its way into markets it was not previously active in and provide a comprehensive array of networking products. Visit Vault at www.vault.com for insider company profiles, expert advice, career message boards, expert resume reviews, the Vault Job Board and more.
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High priest of the digital economy In January 1995, John Chambers succeeded Morgridge as president and CEO of Cisco. Chambers was one of the most vocal and visible proponents of the so-called “new economy.” He confidently predicted the onset of the Internet age – a second industrial revolution. Not only was Cisco manufacturing the hardware that made the Internet work, it was also showing the world how the fully wired company of the future would operate. The company’s success, he insisted, was powered by its paperless office and its real-time access to sales and supply data. Nimble Cisco was where all of corporate America was headed, and Chambers dazzled Wall Street analysts by releasing finalized financial data within 24 hours of the close of each quarter. During the heady days of the 1990s tech bubble, Chambers developed an impressive following of loyal and enthusiastic believers.
Bubble burst But in 2000, the new economy ground to screeching halt. After all the talk about speed and agility in the Internet era, Cisco was caught flat-footed when orders suddenly dried up and the company was left with a mountain of unsold and aging equipment. In the second quarter of 2001, Cisco’s revenue dropped for the first time in its history, and Chambers was eventually forced to write off $2.5 billion worth of inventory. The company’s stock took a nosedive; from a high near $80 per share in March 2000, it dropped to a low of around $12 in September 2001. In an effort to right the ship, Chambers enacted an aggressive restructuring plan. He laid off nearly 10,000 employees and streamlined operations by combining the redundant project teams created by Cisco’s patchwork of acquisitions. In a largely symbolic move, the Cisco chief also slashed his own salary (though not his lucrative stock options) to $1 per year until the company’s recovery.
Judging Chambers Chambers, for his part, has never wavered in his optimism for the future. Quoted in the Toronto Star in May 2003, he confidently declared, “We believe we have uniquely positioned Cisco as the inevitable recovery occurs.” And though many investors are now understandably wary of Chambers’ sunny outlook, his restructuring efforts seem to finally be bearing fruit. The company has cut expenses by 17 percent, which has translated into $1.7 billion in savings. Thus despite falling revenues, the newly lean Cisco is once again profitable. With its gross margins at a record level of 69 percent, the company’s financial performance in 2003 was bettered only by the numbers posted in the last quarters of the bubble-era economy. 40
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And the outlook’s only gotten sunnier in 2004. In August, Cisco announced 4Q2004 record-high net income of $1.4 billion and earnings per share of $.20. This was a significant leap from 4Q2003 net income of $982 million and earnings per share of $.14. That same month, an ebullient Chambers celebrated the turn-around by upping his $1 salary to the $350,000 he’d been receiving before the bubble burst. The month continued on a high note with Cisco distributing $162 million in merit-based common stock options to employees, including $1.5 million to Chambers.
One for the record books Cisco has experienced its strongest growth in the U.S. and the Asia-Pacific region, although Russia has been another highlight with sales growth of 40 percent yearover-year. The company is most excited by the unveiling of CRS-1, a router for the core of large service-provider networks. The Guinness Book of World Records recently certified the CRS-1 as the highest capacity router ever developed, and Chambers believes it “is the biggest jump in innovation since the router was first introduced 20 years ago.” One of Chambers’ ultimate goals is to get a piece of the vast market for telecom equipment and services (worth $750 billion a year in the U.S. alone) and also expand into corporate voice-and-video conferencing networks. He hopes that CRS-1 will be at the heart of these activities. Other innovations from Cisco include three new Integrated Service Routers, which will be the first to deliver secure, wire-speed data, voice, video, and other advanced services to small and medium-sized businesses and large corporate branch offices. The 1800 and 2800 series debut in September 2004, and the 3800 series in October 2004.
Buy, buy, buy During this period of expansion, the company has also taken up its old practice of snapping up smaller companies through a string of recent acquisitions. Three recent deals include agreements to purchase service control platform developer, P-Cube, Inc. for roughly $200 million (August 2004), IT management firm NetSolve, for roughly $200 million (September 2004), and Session Initiation Protocol (SIP)-based solution developer, dynamicsoft, for $55 million (September 2004).
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Target: Cisco Still, the company faces some difficult decisions ahead that will play a large part in determining its future. Competitors such as PC manufacturer Dell and China’s Huawei Technologies are looking to erode Cisco’s market share by introducing lowcost networking equipment and software. Commodification was effective in slashing the prices of PCs in the 1980s and 1990s; a similar process in the networking equipment business could be disastrous for Cisco. The company is defending its turf, ending its cooperative agreement with Dell and bringing a lawsuit against Huawei for alleged patent infringement. Huawei had hoped to begin selling its own software that could be used to operate Cisco routers; Cisco accuses the company of stealing its code. In June 2003, Cisco scored a partial win in the first round of its legal battle with Huawei when a federal judge in Texas issued an injunction preventing the Chinese company from using a portion of its software. The judge, however, denied Cisco a broader injunction that sought to shut down Huawei’s entire software operation, and in September 2004 Cisco agreed to settle on terms considered favorable to Huawei. Although Huawei will amend its user interface and some other code, the settlement didn’t come with huge costs for the Chinese router company. Huawei is also free to continue to do business in the lucrative U.S. market, potentially establishing the company as a major global player and threat to Cisco. Router rival, 3Com is also turning up the heat: In September, 2004 the competitor announced two new sets of low-cost access routers that are designed to be replacements or alternatives to routers sold by Cisco. 3Com claims the routers will cost 30 to 50 percent less than similar offerings by Cisco. Cisco has also started to feel some pressure from relatively small Juniper Networks. Despite revenue of less than $1 billion, Juniper has a reputation for producing big, fast, reliable routers, and Fortune reported that some analysts believe that pound-forpound, Juniper’s T640, released two years ago, may be as fast as Cisco’s new CRS1. Because of delays in getting the CRS-1 to the market, Juniper managed to land some high-profile contracts and steal market share before CRS-1 debuted.
Maneuvering for markets Though Chambers has one eye on the rearview mirror, he is obviously pushing Cisco into new areas of business. The company is looking to expand into previously untapped markets such as IP telephony and wireless networking for corporate environments. It has attempted to muscle its way into the security business by looking for better ways to integrate firewalls and other security features into its
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products. And it is aggressively trying to introduce switching and routing technology into new industries such as cable TV. The company has even installed a prototype cable network in its San Jose headquarters to demonstrate the potential of Cisco technology to deliver video on demand. The CRS-1 will be key in all these strategies.
GETTING HIRED
In need of a few good researchers At the end of 4Q2004, Cisco announced the first net increase in headcount in many years, and the company planned to add another 1,000 employees by the end of the calendar year, a majority of them in research and development.
Locations Cisco is based in San Jose, California and has numerous locations around the world. In the United States, software development is based in the northeast at Cisco campuses in Massachusetts, New Hampshire, and New York. In North Carolina, the company has facilities dedicated to inside sales, customer support, and product development of wireless, optical, and telephony technologies. Locations in Texas and Colorado concentrate on voice, video, and optical technologies. A list of open positions and information about different Cisco locations, including international locations, are available from the web site.
Recruiting Cisco conducts campus recruiting for both internships and full-time positions at locations across the United States and Canada such as MIT, Purdue, Texas A&M, Virginia Tech, and the University of Ottawa. A calendar showing upcoming recruiting events is available from the Cisco web site. Internships at Cisco provide opportunities for college students to “establish important ties for the future” and to “develop career opportunities.” Positions are paid and range from three to six months in duration. Veterans of the program describe “unforgettable” experience and “good support and help from project managers and other employees.” Interns have the opportunity to attend training classes and quarterly meetings where they can meet senior officers of the company. The company also has an MBA development program for business school grads. The program leads to a number of different positions inside Cisco including strategic business analyst, solutions consultant, supply chain manager, or financial analyst. Visit Vault at www.vault.com for insider company profiles, expert advice, career message boards, expert resume reviews, the Vault Job Board and more.
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Benefits Cisco provides a benefit package that includes a 401(k) and medical, dental, vision, and life insurance. Though perhaps not as popular as it was in the high-flying 1990s, Cisco’s employee stock purchase plan is undoubtedly still an attraction for potential workers. The company provides family services such as adoption assistance and reimbursement, breastfeeding support programs, and an on-site child care center at the San Jose headquarters. Additional perks include a baby gift program, employee emergency assistance, ergonomics, financial planning assistance, and legal services.
OUR SURVEY SAYS
High energy Cisco employees work in a “high energy” environment that stresses “productivity above all else.” Recent hires praise the “incredible” training that they receive and relish the chance to work for a company where “intelligence, learning aptitude, and resourcefulness are more highly prized than the ability to kiss butt.” Wired said of Cisco employees: “Nobody has this much fun going to work. All [Cisco employees] do is smile, smile, smile.” An insider adds: “If you are remotely entrepreneurial, you will work crazy hours because you want to, not because you have to.” Happily, though, “there is ‘extra-duty’ pay for salaried employees working weekends and holidays.” Any complaints? The pay is “not up to snuff,” complain some employees. One insider says: “Considering the cost of living in [San Jose], it isn’t great – maybe better than many, but worse than many. The pay scales definitely need adjustment to reflect the extremely high cost of living, as well as the fact that most people in my department are recent college grads with big loans.” However, as a bonus, “other companies will pay lots more – up to 60 percent more – to hire us away.” Some employees are none too thrilled about Cisco’s “non-territorial offices,” the company’s policy of not having assigned desks for most employees (except support staff, which need access to their files, and managers, with their sneaky managerial secrets). Instead, all cubicles are doled out on a first-come, first-served basis. “There can be some competition for the best spots,” says one insider. “It’s like always being on line for a movie, and then the doors open.” Summing up the bright side of working at Cisco, one employee says “I’ve learned more in eight months here than in the years I spent in college. Eventually, I’ll be able to take this knowledge somewhere where I don’t have to worry about making the rent every month.”
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Comcast Corporation 1500 Market St. Philadelphia, PA 19102-2148 Phone: (215) 665-1700 Fax: (215) 981-7790 www.comcast.com
THE STATS
Philadelphia, PA (HQ)
Employer Type: Public Company Stock Symbol: CMCSA Stock Exchange: NASDAQ Chairman, President and CEO: Brian L. Roberts 2004 Employees: 74,000 2004 Revenue ($mil.): $20,307
DEPARTMENTS
KEY COMPETITORS
Accounting Communications Human Resources Sales Telemarketing
DIRECTV EchoStar Communications Time Warner Cable
LOCATION
EMPLOYMENT CONTACT careers.comcast.com/choices
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Vault Guide to the Top Telecom Employers Comcast Corporation
THE SCOOP
Family business gets big A family-owned business, Comcast began with a single cable television franchise in 1963; today it is the largest cable company in the United States, serving more than 21 million cable subscribers. The company sports impressive numbers across the board, with more than 7.6 million digital video customers, 5.2 million high-speed data customers and 1.2 million cable telephone customers. The company is also a leader in eight of the top 10 U.S. markets and boasts about 70 percent of the subscribers in the top 20 U.S. markets. “Diversification” is the latest buzzword in the cable industry, but Comcast has long focused on expanding its business lines. In the late 1980s, Comcast acquired the American Cellular Network and is now a major player in the cellular service market. Comcast also purchased a controlling stake in QVC, the cable shopping channel and provides some telephone services. It even owns a controlling interest in the NBA’s Philadelphia 76ers and the NHL’s Philadelphia Flyers. The company also has investments in content providers such as Comcast Spectacor, Comcast SportsNet, Cable Sports Southeast, E! Entertainment Television, G4 and others.
Cable ready During the 1990s, Comcast began to devote more attention to investing in and developing cable content. In 1995, the company formed its C3 division (Comcast Content and Communication) to create new cable programming and plan ventures related to software and cyberspace. Together with Disney, Comcast owns a majority stake in the E! Television network. Comcast is also betting that cable will be the wave of the future for the Internet and that its diverse product line will enable it to sell product bundles, multiple telephone lines and Internet service packages to customers.
The return of the bartering system In March 1999, Comcast jumped on the cable consolidation bandwagon and announced a plan to merge with rival MediaOne Group Inc., in an all-stock deal worth $48.6 billion. But two months later, MediaOne received a more lucrative offer from AT&T Corp. and terminated its deal with Comcast, which entered into a trade of some of its cable systems with those of AT&T instead. Comcast gained control of Lenfest, Philadelphia’s major cable system, and all Washington, D.C.-area based 46
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cable systems except Fairfax County’s. In November 1999, Comcast bought Lenfest outright for $5.2 billion in stock. Through the trades and acquisitions, Comcast gained one million cable subscribers, the ability to provide multiple services (Internet, cable, and local and long-distance telephone) to households and cachet as the nation’s third-largest cable company. The trade of cable systems further allowed Comcast to cluster its systems while broadening its range of service. Comcast continued to swap cable systems throughout 1999 in order to strengthen its presence in the Mid-Atlantic area. Through an agreement with Adelphia Communications, Comcast gained approximately four million customers in a broad geographic swath that covered New Jersey to Washington, D.C.
Technology leaders Comcast is constantly trying to improve its broadband technology. In coalition with WorldGate Communications Inc., Comcast launched a service offering Internet access, e-mail and channel hyperlinking to television-related web sites in the Philadelphia area in the fall of 1999. Hyperlinking allows television viewers to link to related web sites of television programs while actually viewing a particular program. Comcast is also among the first North American cable companies to deliver interactive television services, using Liberate TV Navigator, a software program developed by Liberate Technologies.
Patient suitor A tumultuous series of events was set into motion once AT&T rejected Comcast’s bid for its broadband operations in 2001, capped by AT&T’s agreement to merge its cable and broadband operations with Comcast. AT&T’s board championed Comcast’s bid – sweetened with offers to assume more of AT&T’s debt and liabilities – only after striking down proposals from AOL Time Warner and Cox Communications. After lengthy negotiations the deal was finally struck in November 2002 when AT&T spun off the broadband unit and merged it with Comcast in a $29 billion deal. This move created the nation’s largest cable company with 21 million subscribers across 41 states, and is valued at around $60 billion. The merger made Comcast, which formerly counted about 8.5 million cable subscribers as customers, a market leader in every digital technology category in the cable industry: digital cable services, video-on-demand and voice over IP telephony services. Under terms of the deal, AT&T shareholders still own about 56 percent of the merged company, and the Roberts family, which founded Comcast, holds about a
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Vault Guide to the Top Telecom Employers Comcast Corporation
66 percent voting interest in the new company. And the deal looks to have had a positive effect on Comcast’s bottom line. For the full year 2003, revenue rose from $8.10 billion to $18.35 billion.
Comings and goings In September 2003, Comcast sold its interest in QVC home shopping network to Liberty Media Corporation for $7.9 billion in cash and stock. Liberty now owns 98 percent of QVC. At the time of the deal, Comcast said it would not use the cash to fund any acquisitions in the near-term. For now, the company’s main priority is to upgrade the former AT&T systems so that Comcast’s entire network will have stateof-the art digital technology. The upgrade will also enable Comcast to offer highspeed Internet access and other services in markets where such services aren’t currently available. But the company did add to its holdings in March 2004 when it bought the TechTV cable network from Microsoft billionaire Paul Allen’s Vulcan Programming Inc. for $300 million. Comcast intends to merge TechTV with its G4 network, which is devoted to the world of video games. EchoStar Communications Corp., which runs the Dish Network satellite television service, is also taking a stake of about 12 percent in the upstart network. The deal more than doubled the reach of G4, boosting its reach from about 15 million homes to about 44 million. TechTV was originally launched in 1998 as Ziff-Davis TV, and is presently based in San Francisco, but the new, combined network, which has yet to be named, will be based in Los Angeles.
Close, but not quite yet In February 2004, Comcast launched a surprising, ambitious and unsolicited bid to acquire media giant Walt Disney Co. The $54 billion offer was firmly rejected by Disney’s shareholders immediately, but that hasn’t quashed speculation that Comcast may try again. If the deal were to eventually go through, Comcast would own the ABC broadcast network as well as the Disney film studio, ESPN and other Disney assets. The proposed deal also put some unwanted added pressure on embattled Disney Chairman Michael Eisner, who at the time was facing a campaign by former Disney directors Roy Disney and Stanley Gold to oust him. In March, Eisner survived the coup attempt, but had to resign as chairman of the board of Disney. Since Eisner was unwilling to discuss the merger, Comcast made an end run around him and sent a
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letter to Disney’s board making its offer public. As of April, no deal was on the horizon, but don’t count Comcast out.
GETTING HIRED
Hiring process Comcast’s employment web page, located at careers.comcast.com, provides links to each of the company’s divisions and a listing of the available positions within each department as well as job descriptions. Comcast asks that those applying for a position within its Comcast Corporation or Comcast Interactive Communications division complete an online resume rather than sending one via snail mail. Following an electronic resume submission, the company may ask qualified applicants to send an actual resume as well.
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Corning Incorporated 1 Riverfront Plaza Corning, NY 14831-0001 Phone: (607) 974-9000 Fax: (607) 974-5927 www.corning.com
THE STATS
Corning, NY (HQ)
Employer Type: Public Company Stock Symbol: GLW Stock Exchange: NYSE Chairman and CEO: James R. Houghton 2004 Employees: 25,000 2004 Revenue ($mil.): $3,854
DEPARTMENTS
KEY COMPETITORS
Accounting Engineering Human Resources Manufacturing Marketing
Agere Systems Alcatel Furukawa Electric
LOCATION
EMPLOYMENT CONTACT Corning Recruiting P.O. Box 1262 Findlay, OH 45840 E-mail:
[email protected]
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Vault Guide to the Top Telecom Employers Corning Incorporated
THE SCOOP
From glass to optics to engines Corning is the world’s most recognized glassmaker, though beginning in the mid1990s it began to sell off some of the divisions that produce the kitchenware and housewares that many American consumers have come to associate with the company. Corning sold off these divisions to concentrate (and invest) more heavily in optical cables, photonics, television displays, and other specialty glass products. Founded in 1851 in rural central New York State, the firm was responsible for making the glass envelope for Thomas Edison’s first light bulb, as well as the red, green, and yellow lenses used in the first traffic light. Most recently, the company has shown a commitment to producing ultra-thin glass for LCD computer and television displays and ceramic substrates for diesel and automotive emissions control.
Big shot Feeling the aftershocks of stagnant sales, Corning has trimmed its product line and research efforts to focus more on fiber optics, which it invented more than 20 years ago. The company is the world’s leading fiber optics supplier, and fiber-optic cable and related photonics represent a full 70 percent of Corning’s revenue. As part of its refocusing effort, the company spun off its medical testing and drug research business in 1996. That move paid off; in 1996 and 1997, the company’s net income increased 12 percent and 19 percent, respectively. In 1998, the firm sold all but 8 percent of its highly recognizable line of brand-name housewares, which included Pyrex and Revere Ware, to Borden, a diverse family of household products. Under the agreement, the housewares business, known as Corning Consumer Products Company, functions as an independent operating company of Borden. However, it remains headquartered in Corning, N.Y.
Always learning Since its earliest days in the mid-19th century, Corning has always maintained that a commitment to research and development is the only way to keep growing its business. The company’s scientists churn out an average of a patent a day, and the firm has led the way in optic and photonic research.
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Vault Guide to the Top Telecom Employers Corning Incorporated
Dow Corning Way back in 1943, Corning got together with The Dow Chemical Company to form Dow Corning to explore the potential of silicones. The joint venture is a leader in providing silicon-based technology around the world, serving a variety of industries. The company began to run into some problems in 1995, however, when it was forced into bankruptcy after thousands of women filed lawsuits claiming Corningmanufactured breast implants had made them sick. In April 2004, a federal judge set a target date for the company to emerge from bankruptcy protection, which paved the way for the 360,000 people who sued the company to begin receiving settlement checks. The company emerged from bankruptcy in June 2004. The company said that it had set aside about $3.2 billion to reach a settlement in 1999. At the time of the announcement, the company said that it plans to eliminate about 250 jobs, or 3 percent of its work force, around the world.
Taking the hit In the late 1990s, Corning invested a whopping $2 billion to meet demand for fiberoptic cable and grew its work force from 15,000 to about 43,000 employees. At the time, it looked like Corning made a wise business decision by tying its fortunes to the fiber-optic market, but was really hit hard by the industry’s 2001 meltdown. The telecom crash almost sank the company. After a spate of overbuilding by telecommunications companies and underutilization, demand for new cable vanished. This was a complete turnaround from just two years prior, when Corning was inundated with orders. During 2001, sales fell 65 percent to $543 million, as such customers as BT, WorldCom, and Qwest cut back or canceled their previous orders. In August 2001, the company announced that it was laying off 450 workers in its Corning Cable Systems division and announced that 450 more had accepted voluntary severance packages. But the cuts were only just beginning. A few weeks later, Corning announced that it would reduce division employment by 1,000 by the end of the year. In October 2001, the company was forced to admit that it had even more bad news: Due to continued low demand, it would shut down its cable plants and restructure all of its production units, a move that resulted in a whopping 12,000 layoffs by the end of the year. The firm also shuffled the leadership in its cable division. All told, Corning lost $5.5 billion for the year. In April 2002, James Houghton returned to the company as CEO (Corning has been guided by his family since 1851), shutting down 13 plants, axing 20,000 jobs, and turning the focus away from the fiber business and reducing the company’s debt by $1.4 billion. 52
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Vault Guide to the Top Telecom Employers Corning Incorporated
A quick turnaround? Thanks in part to weakness at its main domestic rival, Lucent, Corning’s prospects began to look up at the beginning of 2002. In January, it announced that four of its cable plants, including the company’s largest plant in Hickory, N.C., would begin producing again and that laid-off employees would be put back to work. And in May, it inked a $100 million deal with Alcoa subsidiary AFL, which manufactures and markets optical ground wire. While the company has taken steps to make itself financially healthy, it’s not quite there yet. For 2003, the company recorded sales of $3.1 billion, down slightly from 2002 sales of $3.2 billion. The company took far less of a loss this past year, however, taking a $223 million hit in 2003, down markedly from a loss of $1.8 billion in 2002. And the company continues to make strides, closing out 2004 with more than 3.8 billion in revenue.
Getting diesel In order to get the company back to where it was before the crash, Corning decided to get involved in the business of cleaning up pollution. Its target? That old warhorse, the diesel engine. In April 2004, Corning invested $200 million in a factory that will produce diesel filters (called “honeycombs") that trap soot and convert harmful gases into carbon dioxide, nitrogen and water vapor. By 2007, by federal law all new diesel vehicles in the United States will need to be equipped with these smog-reducing devices. According to many industry analysts, the worldwide market in diesel filters is expected to exceed $1 billion by 2008, making this a potentially very profitable move for Corning. It looks like the company has a head start in the industry, though. As of 2003, it was producing more than half of the 100 million honeycombs made each year, accounting for almost $400 million in annual sales. The company employs about 100 people in the unit, but expects that number to grow by 250 more jobs by the end of 2004. But that’s not all. Corning has also recently invested in other projects. In January 2004, spurred on by sales of ultra-thin glass for new-generation computers and televisions, the company came out with a two-year plan to invest more than $600 million in its flat-screen-glass factories in Taiwan and Japan.
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Vault Guide to the Top Telecom Employers Corning Incorporated
GETTING HIRED
Hiring process Corning lists job opportunities on its web site at www.corning.com/careers. Jobs are listed by title; they can also be searched by industry or area of interest, and those interested in applying for one of the open positions can apply online. To submit a general application for unspecified jobs, candidates should e-mail resumes in Microsoft Word format to
[email protected] or mail them to Corning Recruiting; P.O. Box 1262, Findlay, OH 45840. As for student recruiting, company literature states that Corning “maintains relationships” with colleges and universities that provide instruction in areas that match the company’s business pursuits. There is no recruiting schedule posted on the company’s web site, however; interested students are advised to check with their career placement offices to see if Corning representatives will be on campus, so keep your eyes and ears open!
OUR SURVEY SAYS
Devoted, but tired Though “long hours” and “arduous days” are typical, the “intensely devoted” employees at Corning don’t seem to mind. Insiders praise the company’s “generally meritocracy-based” corporate structure which “strives to reward quality work.” They also laud the “thorough training that prepares them for success.”
Changing direction “The company has changed drastically in terms of business direction,” observes one thoughtful insider. “We are rapidly becoming a technological company concentrating mainly on the manufacture of fiber optics.” One thing manages to stay static – and that’s dress code. Corning has a “business casual dress code which applies to everyone – upper management on down.” Apparently, it is “rare to see a male in a suit – you know they are meeting with clients and customers that day.”
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Vault Guide to the Top Telecom Employers Corning Incorporated
Battles with diversity “In the 1970s through the mid-1980s, Corning was not particularly focused on hiring diverse individuals, but that has changed,” reports a source. He adds, “Since I’ve been here, women and minorities are well-represented – though perhaps women more so than minorities.” The last sentiment is common among insiders who are concerned about the diversity issue. “It is difficult for Corning to attract individuals from different racial or ethnic backgrounds,” opines a source. “I believe many of these individuals may find the area [Corning, N.Y.] difficult to live in. Because it’s not a big city, Corning does not have a lot of services that different populations may be looking for.” Others, however, believe the problem doesn’t stem from the area, but from the company itself. Not everyone is so vehement about the issue. “Corning is clearly focused on diversity,” comments another, “and is looking at ways to attract more minority groups.” She continues: “Every employee is required to take a diversity training class upon hiring. I know we have received several awards for our diversity programs and for the implementation of programs that help women succeed in business. For example, we have a professional group called Corning Professional Women’s Forum (CPWF) that meets monthly and brings in speakers to discuss issues related to women in the workforce.” At the management level, the diversity scene seems much the same: problematic. “I find Corning to be an excellent company with fundamentally sound management built on strong values,” reflects one. “One of Corning’s values is people and they do their best to live up to that value. That includes trying to effectively manage a diverse workforce. I believe the senior management is strongly committed to what Corning calls ‘Managing Diversity’ – although, of course, they don’t always succeed.” Be careful to take descriptions of Corning’s culture with a grain of fiber, as many insiders note that the company is “in a constant state of flux.”
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Cox Communications, Inc. 1400 Lake Hearn Dr. NE Atlanta, GA 30319 Phone: (404) 843-5000 Fax: (404) 843-5975 www.cox.com
LOCATION
THE STATS Employer Type: Subsidiary of Cox Enterprises President and CEO: James O. (Jim) Robbins 2004 Employees: 22,350 2004 Revenue ($mil.): $6,425
Atlanta, GA (HQ)
KEY COMPETITORS DEPARTMENTS Accounting Engineering Human Resources Sales Telemarketing
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Comcast DIRECTV Time Warner Cable
EMPLOYMENT CONTACT www.cox.com/CoxCareer/
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Vault Guide to the Top Telecom Employers Cox Communications, Inc.
THE SCOOP
A leader in broadband Atlanta-based Cox Communications is one of the largest broadband communications companies in the U.S., with more than 6.5 million customers across the country. It is the nation’s fourth-largest cable TV company, with 855 cable television franchises across the country and also provides digital video and telephone service, local and long-distance phone service and high-speed Internet access. The company also owns a 25 percent interest in the Discovery Channel.
Part of a media family Cox Communications is majority-owned (63.4 percent) by Cox Enterprises Inc., which has interests in newspapers, television and radio stations, Internet sites. The parent company brought in $10.8 billion in revenue during 2003. Cox traces its roots back to 1898 when James M. Cox bought the Dayton Evening News. (Cox later served as Ohio’s governor for three terms and ran as the Democratic party’s presidential candidate in 1920.) The company first entered the cable TV business in 1962. After the 1996 Telecommunications Reform Act, it expanded into advanced video, voice and data services. In 2002, the company earned the Cablevision/Multichannel News Operator of the Year Award for the third time in the past 10 years and CED Magazine’s Operator of the Year honors.
Growth areas High-speed Internet and telephone services are seen as the next big growth areas for cable companies. Cox has a good lead in both. In April 2002, the number of the company’s high-speed Internet subscribers surpassed the 1 million mark, and by December 2003, the number stood at 1.9 million subscribers. The number of its highspeed phone customers reached the half-million mark in that same month. Cox offers telephone service over cable lines. Its high-speed Internet business is marketed using the Cox High Speed Internet and Cox express names, and the segment has accounted for 7 percent, 11 percent and 15 percent of the company’s total business in 2001, 2002 and 2003, respectively.
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Vault Guide to the Top Telecom Employers Cox Communications, Inc.
The payoff Thanks to its growing business and the popularity of, among other things, its Internet options, Cox posted some good numbers for 2003. During the year, the company added 82,967 Cox Digital Cable subscribers, ending the year with over 2.1 million digital cable customers, a 20 percent improvement over the previous year. The company also added 144,402 high-speed Internet customers, ending the year with over 1.9 million subscribers, a 41-percent jump over 2002. The number of Cox Digital Telephone customers rose by 76,691, ending 2003 with just under 1 million customers, a growth of 38 percent over 2002. Revenue for 2003 reached $5.8 billion, an increase of 14 percent over 2002.
New push The company’s Cox Business Services unit offers high-speed Internet services, switched voice and long-distance service, and dedicated voice, data and video transport services for businesses, government and military entities in 28 markets across the country. In March 2004, the company launched a new marketing campaign in an effort to capture the interest of Fortune 500 companies. Dubbed “Think Bigger,” the campaign ran in 23 of the country’s largest markets using print, radio and television spots. First launched in 1998, Cox Business Services has consistently been profitable. In 2003, the unit earned revenue of $287 million, a 25 percent increase over 2002, and provides services to more than 100,000 customers.
Keeping it together In February 2004, Cox agreed to a multi-year deal with sports network ESPN that will keep ESPN’s channels on Cox systems. The agreement finally put to rest a very public battle between the two sides. The acrimony first bubbled up when Cox claimed that ESPN was boosting the fee Cox was required to pay for the right to carry the sports network’s programming by as much as 20 percent over the previous year’s fee. The tensions increased when ESPN denied that the rate increases were as high as Cox claimed and said that the rates Cox passes on to its subscribers have more to do with its own overhead expenses than programming costs. Cox’s then-existing contract with ESPN was to have expired in the spring of 2004, but under the new deal, the Walt Disney-owned ESPN and ESPN2 will stay on Cox’s expanded basic cable tier of channels. Originally, Cox wanted to either pay a lower fee for the rights to ESPN or have the right to put the networks on a premium pay tier, where it could then charge customers a higher fee for access to the channels.
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Vault Guide to the Top Telecom Employers Cox Communications, Inc.
Although all the terms of the deal weren’t released, it seems that the deal also allows Cox to launch the Spanish-language service ESPN Deportes in markets where it offers a Spanish-language service, and continues the Cox distribution of ESPNEWS, ESPN Classic and ESPN HD. In a related sports programming vein, in December 2003, Cox inked a six-year deal with Fox Sports Net’s regional networks that reportedly called for a lower fee to the to Fox owner, News Corp., than Fox had originally demanded.
New deal in the works? Tongues began to wag in March 2004 when word leaked out that Cox was interested in acquiring some or all of the assets of Adelphia Communications, the beleaguered cable TV system operator. Adelphia founder John Rigas and his two sons are currently on trial on conspiracy and fraud charges, accused of taking company assets and money for personal use. Adelphia filed for bankruptcy protection in 2002, after it was discovered that the company was responsible for billions of dollars in loans taken out by the Rigas family to purchase the Buffalo Sabres NHL hockey franchise, a private golf course and private jets, among other things. Adelphia is currently the nation’s fifth-largest cable operator, (one rung below Cox) and despite the financial trouble, is still a highly valuable property with 5.4 million subscribers to its basic cable service. The speculation started when a report in the trade magazine Broadcasting and Cable stated that Cox is “carefully evaluating” how it could buy all or part of Adelphia. The article quoted Cox CEO Jim Robbins as saying that he doesn’t want to do a deal with Adelphia until it emerges from its Chapter 11 proceedings, but left the door open to action after the case is settled. For its part, Adelphia is expected to emerge from Chapter 11 protection by the end of 2004.
Snooping around In April 2004, in a sign of our security-heightened times, Cox contracted with infrastructure provider VeriSign to open up its Internet-based telephone service to law enforcement officials looking to eavesdrop on suspected criminal activity. Cox is set to implement the VeriSign NetDiscovery Services for Cox’s new voice over Internet Protocol (VoIP) cable service. The move comes as Cox is trying to comply with the 1994 Federal Communications Assistance for Law Enforcement Act, which requires telecommunications carriers to ensure their networks comply with
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Vault Guide to the Top Telecom Employers Cox Communications, Inc.
government specifications for wiretapping by law enforcement. Cox first launched its VoIP service in 2003.
GETTING HIRED
Hiring process Cox places a listing of all available positions nationwide on its web page located at www.cox.com, where job hunters can search by location or business segment. Those interested can submit an online application through the site as well. The site also offers a list of campus recruiting events the company participates in, and internship information.
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The DIRECTV Group, Inc. 2230 East Imperial Highway El Segundo, CA 90245 Phone: (310) 964-0700 Fax: (310) 535-5225 www.directv.com
LOCATIONS El Segundo, CA (HQ) Boise, ID Castle Rock, CO Germantown, MD Long Beach, CA Los Angeles, CA
THE STATS Employer Type: Public Company Stock Symbol: DTV Stock Exchange: NYSE Chairman: K. Rupert Murdoch President and CEO: Chase Carey 2003 Employees: 12,300 2003 Revenue ($mil.): $10,121
KEY COMPETITORS Comcast EchoStar Communications Time Warner Cable
EMPLOYMENT CONTACT www.directv.com/DTVAPP/aboutus/ WorkingHere.dsp
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Vault Guide to the Top Telecom Employers The DIRECTV Group, Inc.
THE SCOOP
The dish on entertainment The DIRECTV Group, known as Hughes Electronics Inc. before renaming itself in March 2004, provides digital and satellite TV service to 12.6 million American households. The company also runs Hughes Network Systems, which develops broadband satellite networks for government agencies, businesses and consumers. The DIRECTV Group is the third-largest defense contractor in the U.S., and also has the largest non-governmental fleet of communications satellites in orbit. The company is also one of the world’s largest suppliers of satellite-based private business networks, and is among the top providers of wireless telephone networks and cellular mobile systems.
A space odyssey Hughes Electronics was founded in 1932 to construct experimental planes by Howard Hughes, an airspeed world-record holder. The company he founded has a few records of its own: it produced the first laser beam in 1960 and installed the first communications satellite in geosynchronous orbit three years later. Hughes was plagued by canceled defense contracts during the early 1980s. General Motors took over Hughes Electronics in 1985, seeing an opportunity to ride satellite technology into the commercial TV market. But the carmaker never developed a strategy that caught on with investors. When Hughes unveiled the DIRECTV service in the 1990s, it began to draw the attention of media moguls. After a dizzying series of lawsuits and deals, Rupert Murdoch – the baron behind Fox Entertainment – gained 34 percent of the company’s stock in late 2003. The renamed company sells digital and satellite TV service to roughly 12.6 million subscribers under the DIRECTV brand – a vehicle for Murdoch’s ambitions.
Satellite insight In December 1998, Hughes merged with satellite television service United States Satellite Broadcasting in a $1.3 billion agreement. Hughes then combined USSB’s assets and satellite frequencies with its DIRECTV business. Hughes bought PrimeStar Inc., a provider of direct-to-home satellite television for $1.82 billion in January 1999. The deal allowed Hughes to acquire PrimeStar’s 160-channel,
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medium power direct broadcast satellite, as well as its Tempo high-power satellite assets. America Online Inc. invested $1.5 billion in Hughes’ satellite operations in June 1999 as part of a strategic attempt to increase its visibility in the broadband market. Four years later, however, Hughes terminated the deal. In November 2001, Hughes joined with WorldCom to deliver two-way satellite Internet access.
Deals, deals, deals Raytheon Co., an industry leader in defense and government electronics, services, and technology, purchased Hughes’ defense operations branch in October 1997 for $9.5 billion. Hughes sold off its satellite-making unit to Boeing, the aerospace giant, for $3.75 billion in January 2000. Hughes Network Systems won a $27 million, 10-year contract with GTECH Corp., an operator of transaction processing systems and services for the lottery industry, in January 2003. That April, Hughes extended a contract with BMW of North America to provide networking services to the car manufacturing giant. Hughes Network Systems also sold off its 55 percent stake in Hughes Software to Flextronics International, a Singapore-based electronics manufacturer, for $226 million in June 2004. Thomas S.A., a French electronics manufacturer, paid $250 million in cash to Hughes for its set-top box manufacturing assets in May 2004.
Broadband explosion In March 1999, Hughes, sensing the inevitable explosion of broadband data, invested $1.4 billion into the Spaceway global broadband satellite network. Spaceway was a high-bandwidth and high-speed communications system designed to provide bandwidth on demand, with customers paying for only the bandwidth they use. Hughes discontinued its line of cellular and narrowband, local loop communications products at the start of 2000 in an attempt to focus on broadband and high-speed communications systems. By the end of the year, Hughes added to its broadband arsenal with the acquisition of digital service line provider Telocity, Inc. for $179 million. The acquisition allowed Hughes to become the first U.S. provider of both digital multichannel television and wired and satellite broadband Internet access. Hughes built a 43,000-square-foot, $20 million “nerve center” for its Hughes Network Systems division in July 2001 in Germantown, Md. The opening of the operations center was the start of Hughes’ push into the broadband satellite service realm with its DirecWay service, a two-way connection in which users could receive and send data over the same wireless receiver. Over the next two years, the company Visit Vault at www.vault.com for insider company profiles, expert advice, career message boards, expert resume reviews, the Vault Job Board and more.
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Vault Guide to the Top Telecom Employers The DIRECTV Group, Inc.
expanded DirecWay to include satellite services to South America, China, and East Africa through Hughes Telecom Americas of Sao Paulo, ChinaCast and AFSAT Communications Ltd., respectively.
Ch-ch-changes General Motors attempted to sell Hughes to EchoStar Communications, but antitrust regulators blocked the deal on competitive grounds in October 2002, claiming the resulting merger would create a monopoly. The two sides worked to restructure the deal, but were again rejected in December 2002; they terminated the merger for good soon after. Hughes let go of nearly half of DIRECTV Broadband’s employees, and closed its high-speed Internet service business, blaming the failed EchoStar merger for the cuts. GM regrouped, mulled over multiple offers, and eventually sold its interest in Hughes to Rupert Murdoch’s News Corp. in September 2003. News Corp., the Sydney-based media giant, bought Hughes Electronics Corp. its and DIRECTV satellite subsidiary in December 2003 for $6.6 billion. Through the deal, News Corp. acquired 34 percent stake in Hughes Electronics, which it then transferred to its Fox Entertainment Group Unit for two promissory notes totaling $4.5 billion and 74.5 million Fox Entertainment shares valued at $27.99 each. Hughes closed its DIRECTV Broadband operation in 2003.
Courtroom dramas During the summer of 2003, DIRECTV, along with EchoStar Communications Corp., took on the states of Ohio, Tennessee, and North Carolina in separate lawsuits contending a sales tax that had been placed on satellite television companies, but not on local cable television services. The sales tax was local cable operator’s response to a competitive edge lost to faster-growing satellite services; EchoStar and DIRECTV declared the tax a direct violation of the Commerce Clause of the U.S. Constitution. No further information on the status of the suits was known as of this writing. In May 2004, DIRECTV won $62.6 million in damages after a federal jury ruled Pegasus Satellite Television Inc. and its Gold Sky Systems Inc. unit violated a marketing contract between the two companies. DIRECTV claimed Pegasus did not fairly reimburse it for subscriber acquisition costs.
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Vault Guide to the Top Telecom Employers The DIRECTV Group, Inc.
I left my wallet in El Segundo In the first quarter of 2004, DIRECTV’s $2.5 billion in revenue fell about $90 million short of covering operating costs. The company expects to continue to battle big cable companies for subscribers. It hopes to lure customers by showcasing programs from Murdoch’s Fox Entertainment, gussied up with digital effects. (For example, Murdoch boasted of a feature that would let viewers select their own camera angles during NFL games or contests of the American Idol variety.) The battle with the well-capitalized cable companies will take years, so DIRECTV has shed expensive businesses during 2004. In March, it sold its stake in XM Satellite Radio. A month later, it sold a commercial satellite fleet to a private equity firm for $2.78 billion in cash. In November 2004, the company was in talks with Apollo Management LP to sell a controlling interest in Hughes Network Systems. Even though Murdoch concedes that cable companies reached subscribers early with digital services, some observers expect DIRECTV to make a dent in cable’s coverage. Murdoch used satellite to create powerful networks in Europe and Asia. He presumably hopes for more lavish rewards in the U.S.
Mission control DIRECTV has been fine-tuning its offerings to suit American audiences. Although satellite TV has been available for years, the service typically did not include local channels. DIRECTV is changing that. The company has planned to launch a satellite late 2004 that will enable it to sell local channels in more markets. Chase Carey, a longtime Murdoch deputy who serves as the company’s CEO, told BusinessWeek that he hopes to serve all 210 local media markets in the U.S. by 2008. The company also aims to carry broadcast networks’ enhanced video. In spring 2004, it rolled out highdefinition programming from CBS in eight major markets. Moves like this helped DIRECTV add 484,000 subscribers in the third quarter of 2004 – an increase of 18 percent over the number of new subscribers during the same period in 2003.
Satellites R’ Us Today, The DIRECTV Group is a world leader in the design, production, and marketing of advanced electronic systems including satellite technology, its bread and butter. DIRECTV is the world’s largest communications satellite maker having made nearly 40 percent of the commercial satellites currently in orbit. The company also owns 81 percent of PanAmSat, a 25-satellite global communications network.
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Vault Guide to the Top Telecom Employers The DIRECTV Group, Inc.
GETTING HIRED
Log on for an out-of-this-world job Today, the company seeks help developing its network and marketing what the network carries. The company appears at campus job fairs: check with your career services office. The career section of its web site, www.directv.com/DTVAPP /aboutus/WorkingHere.dsp, accepts online applications for posted jobs. Candidates can also use the site to create an employment profile.
Pay-per-(re)view Whether you’re a scientist or a salesperson, DIRECTV uses software tools to calculate pay according to a set of benchmarks. The company calls this “performance-based pay” a chance to develop valuable skills, and pairs it with incentive plans. The company offers formal training in performance evaluation, team building, technical projects, and leadership. If the prospect of managerial report cards gets too stressful, workers can find balance in some DIRECTV perks. Offices include on-site massage services and mothers rooms for nursing; the company also provides “celebrations of shared successes.” Outside the office, the company emphasizes the splendor of its surroundings. Its major operations – in Southern California, metropolitan Denver, and Boise – all provide easy access to the great outdoors.
Across the spectrum The company says it makes a point of “recruiting from diversity-based organizations” and training staff in “diversity awareness.” It also says it seeks a “workforce that mirrors our customers, business partners and investors.” Customer service positions seem likely to gain importance as marketing grows intense.
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EchoStar Communications Corp. 9601 South Meridian Blvd. Englewood, CO 80112 Phone: (303) 723-1000 Fax: (303) 723-1399 www.dishnetwork.com
LOCATIONS Englewood, CO (HQ) Atlanta, GA Baltimore, MD Bluefield, WV Cheyenne, WY Chicago, IL Christiansburg, VA Dallas, TX Denver, CO El Paso, TX Englewood, CO Harlingen, TX Gilbert, AZ Littleton, CO Pinebrook, NJ Pittsburg, PA Sacramento, CA Thornton, CO Tulsa, OK Eldon, UK
THE STATS Employer Type: Public Company Stock Symbol: DISH Stock Exchange: NASDAQ CEO and Chairman: Charles W. Egren 2003 Employees: 20,000 2003 Revenue ($mil.): $5,739
KEY COMPETITORS Comcast DIRECTV Time Warner Cable
EMPLOYMENT CONTACT www.dishnetwork.com/content/ aboutus/careers/index.asp
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Vault Guide to the Top Telecom Employers EchoStar Communications Corp.
THE SCOOP
Beaming to a home near you With a single-minded focus, EchoStar Communications Corporation has beamed television images into so many U.S. households that it’s now the fourth-largest payTV provider in the country. Its satellites orbiting the earth constitute its DISH Network, which delivers TV shows to more than 10 million subscribers. Headquartered in Englewood, Colo., the public company employs roughly 20,000 people and raked in about $5.7 billion in 2003.
First in line EchoStar has consistently been on the forefront of satellite endeavors, becoming the first company to offer a satellite receiver for less than $200, develop a UHF remote control, a nationwide installation network dedicated solely to satellite TV, a satellite receiver with built-in digital video recording and also to provide local channels to local markets in all 50 states.
From Colorado to the stars With technology evolving faster and faster with each passing decade, it’s easy to forget that not all advances were spawned in the last five years. By 1980, Charlie Ergen was already in tune with the latest in television transmissions as a distributer of C-band TV systems. That year, along with his wife Cantey and friend James DeFranco, he opened EchoSphere for business. The new company started out marketing C-band satellite TV dishes to rural Colorado customers. It filed for a DBS license from the Federal Communications Commission (FCC) in 1987 and was granted access to a slice of the sky – orbital slot 119 degrees West Longitude – in 1992. Three years later, the company established the DISH Network brand name and, just after Christmas, it launched its first satellite, EchoStar I, from Xichang, China. Within a year, it had already signed up 100,000 subscribers and boasted 1 million a year after that. In 1996, the launch of EchoStar II expanded the network’s capacity as the company acquired new orbital slots. EchoStar III went up in October 1997, followed by EchoStar IV in May 1998, EchoStar V in September 1999, and EchoStar VI in July 2000.
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Vault Guide to the Top Telecom Employers EchoStar Communications Corp.
Nine and counting EchoStar’s latest satellite, EchoStar IX, was launched in August 2003. Shot off from a platform floating near the equator, it was the first satellite decked out with commercial Ka-band payload to explore the potential of providing broadband service in America. In mid-June 2003, a white tractor-trailer hauled the satellite, ensconced in an innocuous-looking white box, to the port in Long Beach, Calif., for processing. Nearly a month later, the huge white satellite – twice the size of an elephant and emblazoned with the DISH Network and other logos – was ushered slowly by orange-vested workers to the Sea Launch Commander for “mating” with the Zenit 3SL launch rocket. Days later, two cranes lifted the integrated unit onto the Odyssey launch platform – an enormous, glimmering structure sitting upon massive pylons, hovering far above the ocean. In August the satellite was launched into space and settled into its orbit at 121 degrees West Longitude. EchoStar has plans to launch yet another satellite in 2005.
Some legal hurdles In June 2002, the FCC revoked EchoStar’s license to use Ka-band frequency at 113degrees West Longitude, citing the company’s missed construction milestones and insufficient documentation; but the decision was reversed in November of the same year. EchoStar attempted to acquire Hughes Electronics, owner of DirecTV, in October 2002, only to have the FCC reject its initial proposal. The FCC claimed the resulting merger would create a monopoly in areas with no cable reception, eliminating competition. Both sides restructured the deal, and were again rejected in December 2002; they terminated the merger for good soon after. During the summer of 2003, EchoStar, along with DIRECTV, took on the states of Ohio, Tennessee and North Carolina in separate lawsuits contesting a sales tax placed on satellite television companies, and not local cable television services. The sales tax was local cable operators’ response to a competitive edge lost to faster-growing satellite services; EchoStar and DirecTV declared the tax a direct violation of the Commerce Clause of the U.S. Constitution. The same summer, the state of Florida slapped EchoStar with an order to cease offering out-of-market television signals. The National Association of Broadcasters declared a victory, charging that EchoStar had been “illegally transmitting distant ABC, CBS, Fox and NBC stations to ineligible subscribers.” EchoStar, however, believes that consumers have a right to receive these channels and is continuing to fight in court for the right to provide them. Visit Vault at www.vault.com for insider company profiles, expert advice, career message boards, expert resume reviews, the Vault Job Board and more.
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Vault Guide to the Top Telecom Employers EchoStar Communications Corp.
TiVo filed a patent infringement lawsuit against EchoStar in January 2004, stating EchoStar violated TiVo’s “multimedia time warping system,” an invention described by TiVo as one which “allows the user to store selected television broadcast programs while the user is simultaneously watching or reviewing another program.” EchoStar offers set-top boxes with digital video recorders (DVRs), which use technology similar to TiVo’s design. EchoStar first introduced DVRs in 1999 the same year as TiVo. In March 2004, EchoStar became involved in a nasty battle over programming fees with Viacom, causing millions of customers to lose Viacom-owned cable channels for more than 24 hours. EchoStar accused Viacom of charging unreasonable rates to pick up cable channels in exchange for the opportunity to carry CBS-owned stations. Viacom officials in turn urged DISH Network customers to switch satellite providers. But the two companies made up, negotiating a deal a few days after EchoStar’s initial cancellation.
One dish, two dish... In May 2004, a House of Representatives subcommittee approved a bill requiring EchoStar and DIRECTV to offer local stations and specialty cable channels on one dish. Previously, EchoStar had addressed capacity restraints by requiring subscribers in 38 cities to own two dishes, provided free of charge by the company. The final bill gave EchoStar and DIRECTV a window of 18 months to complete the dish merger. The bill helps “to ensure that consumers where local-into-local is available have ready access to all local broadcast stations in their market,” said a House chairman, and is an extension of a broader piece of legislation allowing satellite television companies to offer local broadcasts.
Taking off Throughout the 1990s, EchoStar focused on enhancing its core products and gaining new subscribers. By 2000, EchoStar was reaching five million customers and had opened a sixth customer service center in West Virginia, which joined others in Virginia, Texas, Wyoming, Colorado and Pennsylvania. The company started offering “bundled” communications services to customers through strategic alliances with companies like SBC, Sprint, EarthLink and Qwest, although the company ended its alliance with Qwest amicably in 2004. By 2004, EchoStar and Radio Shack had reached an exclusive agreement to provide Sirius satellite radio service and to expand into new markets. Even amid all the growth, the company continued to focus on
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pleasing its customers. The company has ranked No. 1 in J.D. Power and Associates’ survey of customer satisfaction among satellite/cable subscribers for several years, including the latest survey, which was released in 2004. With the melting of the winter frost and blooming of spring buds in 2004, EchoStar announced a new program offering that it expects to be a big draw for DISH network customers: live bingo. (According to BusinessWeek, CEO Ergen is a former professional blackjack player.) That’s in addition, of course, to Spanish language payper-view movies, HBO, Cinemax and channels like MTV, ESPN and CBS that EchoStar carries through long-term agreements with Viacom and other programmers.
Long-term leadership Ergen is still at the helm, and his long-time pal DeFranco, remains at his side as executive vice president. That makes the company somewhat of an anomaly in the world of big business, where executive turnover every few years is common. But the consistent leadership seems to be a strategy that has worked well for EchoStar. Ergen announced in November 2004 that the company’s third quarter profit had nearly tripled from the same period the year before, jumping to $102 million versus $35 million in 2003. But a BusinessWeek article published in November 2004 shortly before the third quarter earnings announcement, speculated about the company’s growth potential, given the amount of competition from DIRECTV and cable operators and the high cost of marketing to and signing up new subscribers and merger possibilities.
GETTING HIRED
Coming soon to a campus near you A variety of jobs exist at the technical, undergraduate and graduate levels. EchoStar also offers a summer internship program, and currently recruits at the following universities: Thunderbird, the Garvin School of International Management, Colorado State University at Fort Collins, University of Colorado at Boulder, University of Denver and the Daniels College of Business, Baylor University, University of Colorado at Denver, Regis University, University of Wyoming, Montana Tech at the University of Montana, South Dakota School of Mines and Technology, Purdue University and the Krannert School of Management, Vanderbilt University, Auburn University, Georgia Institute of Technology, University of Florida, Clemson Visit Vault at www.vault.com for insider company profiles, expert advice, career message boards, expert resume reviews, the Vault Job Board and more.
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University, Wake Forest University and the Babcock Graduate School of Management, Brigham Young University, University of Richmond and the Jespen School of Leadership Studies, University of Virginia and Virginia Polytechnic Institute. Applicants can view the college recruiting section of the company’s web site at www.dishnetwork.com/content/aboutus/careers/college_recruiting/index.html to learn more. Applicants who make it through an initial on-campus interviews and assessment tests go through a final round of interviews in either November (for fulltime hires) or March (for summer internships). The company also has a searchable database on its site that includes professional and technical openings. In addition to health insurance (medical, dental and vision), profit-sharing and 401(k) plans and paid time off, EchoStar provides tuition reimbursement and a free dish and service.
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Lucent Technologies Inc. 600 Mountain Avenue Murray Hill, NJ 07974 Phone: (908) 582-8500 Fax: (908) 508-2576 www.lucent.com
LOCATION
THE STATS Employer Type: Public Company Stock Symbol: LU Stock Exchange: NYSE Chairman and CEO: Patricia F. Russo 2004 Employees: 31,800 2004 Revenue ($mil.): $9,050.0
Murray Hill, NJ (HQ)
KEY COMPETITORS DEPARTMENTS Engineering Management Marketing Sales Telecommunications
Alcatel Cisco Systems Ericsson Motorola Nortel Networks
EMPLOYMENT CONTACT www.lucent.com/work/ work.html
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THE SCOOP
The ring of innovation Lucent Technologies was spun off from AT&T in 1996, deriving its name from the idea of “light” and “clarity” associated with the word “lucent.” Its symbol, a bright red brushstroke in the shape of a circle, called “The Innovation Ring,” is supposed to signify technical symmetry; more recently, investors and associates likely hope the circle suggests a turn-around for the company in a sluggish telecom industry. The company designs and delivers networks for some of the world’s largest communications service providers, offering optical, data, and voice networking technologies. Once a darling of Wall Street, Lucent has seen its profits and stock price plummet since 2000. In 2001, the company began a major restructuring, which allowed it to focus on two key customer segments: wireline and wireless networks.
Acquisition binge Since its creation in 1996, Lucent has completed 39 acquisitions totaling more than $46 billion. One of those acquisitions was Excel Switching, which Lucent bought in 1999 for $1.48 billion. Excel makes programmable switches that allow telephone companies to easily update their networks without having to dismantle existing systems. In June 1999, Lucent made its largest acquisition ever when it bought Ascend Communications for $20 billion. The move made Lucent the leading provider of data networking equipment for service providers. In February 2000, Lucent bought Ortel Corp. for $2.95 billion. In June 2000, Lucent expanded once again when it purchased Chromatis Networks for $4.5 billion. Chromatis’ Metropolis product allows multi-service traffic, such as voice, data and video, to travel efficiently on crowded metropolitan networks. Lucent acquired Spring Tide Networks, maker of network switching equipment, for $1.3 billion of stock in July to expand its Internet protocol market. Later that year, Lucent attempted, but ultimately walked away from a proposed $23.5 billion merger with French networking firm Alcatel.
Some spin-offs of its own By the end of 2000, a declining industry and Lucent’s plummeting stock price had hampered its ability to make new acquisitions. Additionally, Lucent was left holding the bag when some of its Internet start-up customers went bust after Lucent had financed their equipment purchases. And so, Lucent began to streamline its business, 74
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which included shedding many of the businesses it had purchased. Headcount was also dramatically reduced, both through the aforementioned sales of various operations and layoffs. At the end of 2001, some 30,000 employees had lost their jobs in the restructuring, bringing the total number of employees down to about 77,000. By April 2002, approximately 30,000 more jobs had been cut, with 6,000 more planned cuts by year’s end. Company insiders complained of the cuts, and also detailed a variety of company cuts at headquarters, such as removing fluorescent light bulbs in overhead lighting fixtures, setting the thermostat higher to reduce airconditioning demands and reducing security guards. In March 2000, Lucent announced plans to spin off its business communications systems segment in an effort to sharpen its focus. In September, Lucent spun this unit off, creating Avaya, an $8 billion enterprise network business. The spin-off was devised to allow Lucent to focus on its high-growth Internet infrastructure and wireless operations. In April 2001, Lucent’s microelectronics business, Agere Systems, went public. The deal helped Lucent raise $3.6 billion, but that was less than half of what Lucent had originally hoped for.
Changes at the top Lucent fired CEO Richard McGinn in October 2000 following a series of earnings warnings. McGinn, who had served as the chief executive since 1997, had been unable to stem falling revenue as well as the declining price of the company’s stock. Furthermore, the company had also lost its lead in some markets to rivals, including Nortel. Henry Schacht, who preceded McGinn as CEO, returned to the position once again to head up the company. In January 2002, he was replaced by Patricia Russo, who had been serving as COO at Eastman Kodak. Russo was no stranger to Lucent; she had been one of the founding executives who helped launch Lucent’s spin-off from AT&T in 1996.
A major restructuring At the start of the 21st century, Lucent began a major restructuring of its business as it tried to weather the telecommunications slump. Lucent realigned its remaining businesses and modified many of its internal systems to improve efficiency. The streamlining allowed Lucent to focus on two key customer segments: the next generation of wireline and wireless networks. Lucent also received a financial boost when it entered into a three-year, $1 billion deal with Sprint to supply equipment and services for the expansion of Sprint’s wireless network.
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During the summer of 2001, Lucent sold its Optical Fiber Solutions business for $2.525 billion to Furukawa Electric, Co., Ltd. Furukawa was a partner with Lucent in FiNet, a packager of high-volume, low-cost uncooled laser and detector components. Corning Incorporated, a materials pioneer and world’s top maker of the fiber optic cable, also paid $225 million to Lucent for interests in Lucent Technologies Shanghai Fiber Optic Co. Ltd. and Lucent Technologies Beijing Fiber Optic Cable Col., Ltd. Next, Lucent sold a manufacturing plant in Columbus, along with its equipment and inventory, for between $550 million and $640 million to electronics manufacturer Celestica Inc., which also leased Lucent’s Oklahoma City plant. Celestica also agreed to build switches and networking equipment previously produced by Lucent.
Signs of change In October 2003, however, Lucent stock soared, hitting a new 52-week high during the last week of the month. CEO Russo proudly suggested that the company was stabilized and back on track. In November, Lucent collaborated with SUN Microsystems to create the Enhanced Communications Solution (ECS), a suite of products, services, and programs created to increase operational efficiencies and enhance revenue. The next month, Lucent announced a partnership with InMotion, an innovator of passenger-area networking solutions, to integrate third-generation mobile networks and Wi-Fi networks. Lucent acquired Telica, a Massachusetts-based provider of voice over Internet protocol (VoIP) services and solutions in May 2004, for approximately $295 million in stock and options. The deal notably strengthened Lucent’s VoIP portfolio, and enhanced its ability to link next-generation and legacy networks for wireline and wireless customers. In the fall of 2004, Lucent saw its revenue increase 19 percent, capping off its remarkable turnaround with its fifth straight quarter in the black. Lucent also partnered with Verizon Wireless to set up nationwide broadband services, and with Cingular Wireless LLC to test high-speed networks. In November 2004, Cingular Wireless awarded Lucent a contract for its nationwide 3G universal mobile telecommunications system deployment. Then, the following month, Lucent and Sprint signed a 3G network agreement that’s expected to exceed $1.5 billion over three years.
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Going global Lucent, along with business partner Verysell Telecom, entered the Russian market in July 2003 after successfully completing an expansion of SKYLINK, a network for Delta Telecom, Russia’s first mobile operator in a third-generation mobile network. The development significantly increased Delta’s voice and high-speed data service coverage area to include the Karelian Isthmus and a number of additional cities in the St. Petersburg area. Mexico City-based mobile phone company Iusacell SA made an agreement with Lucent during the fall of 2004 that allowed Lucent to expand Iusacell’s thirdgeneration wireless services network. Lucent will provide, install and maintain software and equipment to expand the coverage and capacity in the areas where Iusacell operates. Lucent has also shown it’s serious about growing in China in 2004. The company committed to investing $70 million to build and upgrade thirdgeneration wireless networks in China.
A fine and a refund When Lucent failed to cooperate with a 2004 investigation of its accounting regulations, the SEC slapped the company with a $25 million lawsuit that claimed Lucent not only violated security laws, but also helped the company book bogus sales and inflate its pretax income by nearly half a million dollars in 2000. Lucent agreed to pay the fine, but did not admit to wrongdoing. Later in the year, though, it was Lucent that was on the receiving end of a big check – a really, really big check – and it came from the government. The payment of $861 million came in the form of a tax refund. The company booked the proceeds under its fiscal 2004 fourth quarter, boosting net income for the quarter to $1.21 billion.
Benefits no more In September 2004, Lucent announced plans to cut retiree health benefits for dependents of retired workers who retired after March 1, 1990, with a salary of $65,000. The company previously cut the same benefits for dependents of workers who had a base salary of $87,000 in the fall of 2003. The cuts saved Lucent roughly $90 million dollars in expenditures. Dependents still have access to benefits at a group rate, which is lower than the market rate. The cuts were big news, however, because the company had previously paid 100 percent of retirees’ healthcare coverage.
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A Lucent spokesperson declared the cost of retiree benefits to be $800 million annually, an “unsustainable” level for a company with an expanding number of retirees and which has suffered loses over the past few years. Ken Raschke, the president of the Lucent Retiree Organization, countered in a statement that the company lacked compassion for retirees, while continuing “excessive” compensation for top management positions. Tensions between the retirees and their former employer cooled somewhat though in November 2004 after the company managed to hammer out an agreement with unions representing the retirees that resulted in the healthcare costs for retirees being much lower than expected.
Friends in high places Lucent tapped the resources of former Virginia Governor James Gilmore in the fall of 2004 to help the company’s expansion into the federal government sector. The company created an independent advisory boarding comprised of former officials and policy makers to aid its Government Solutions division. Other advisors of the panel include Ruth David, president and CEO of the nonprofit firm ANSER; Tillie Fowler, chair of the Defense Policy Board Advisory Committee at the D.C. law firm of Holland & Knight; and John Stenbit, recently retired Department of Defense CIO.
GLBT friendly A 2002 study by the Human Rights Campaign Foundation in Washington D.C. declared Lucent to be among only 13 out of 319 major Fortune 500 companies that scored 100 percent on a national Corporate Equality Index, which measured fairness and non-discriminatory policies in the workplace aimed toward gay, lesbian, bisexual and transgendered employees. Lucent also received a perfect score on the Index in 2003 and 2004. In 2004, Lucent was also named to “best of” lists published by Latina Style, Working Mother and others.
GETTING HIRED
Check your resume Lucent maintains an employment web page titled work@lucent that can be reached from the company’s web site at www.lucent.com. The web page provides access to
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current job listings, college recruiting information and an online application program. After applicants complete their resumes online, Lucent keeps them in its “electronic files” and matches them with new job opportunities that arise. Those who are interested in working for Lucent should take note that applying to a specific position versus creating a resume for the company’s general database ensures that your resume will be reviewed.
Bright students wanted Lucent has an extensive network of recruiting and internship opportunities. The summer internship program for students who have completed at least one year of college provides a broad introduction to many facets that comprise the company. College internships are available for both part-time and full-time college students. Lucent also has a co-op program in which undergraduate students may work full time and receive financial compensation and academic credit. In addition, Lucent participates in INROADS, a national career development organization for minority students that places talented students in business and industry internships and summer employment. The Financial Development Leadership Program is a demanding 38-month program in finance for college graduates combining on-the-job training with graduate-level education. The LDPSCN Leadership Program, a fusion of Leadership Development and Supply Chain Networks, is a rigorous 36-month program during which participants spent approximately 12 months in a variety of rotations that offer a range of responsibilities and business opportunities. Internships and co-ops may be based at various locations throughout the United States.
OUR SURVEY SAYS
Diversity: The global village One longtime Lucent employee reports that “staff comes from all over the world. There is a particularly large segment of our staff with an Asian background, led by China, India, Bangladesh and Korea. Europeans, Canadians, African-Americans, Middle Easterners and Hispanics are also heavily represented.” Lucent employees also teach at African-American engineering schools.
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The sartorial split: techies v. marketing “Lucent is a very large company,” so the culture varies quite a bit. “Research is the most relaxed area, very much like a university environment. There are lots of jeans, T-shirts and sandals in the summer, without a necktie or pantsuit in sight. But there are other areas of the company, especially sales, marketing and business areas, with direct contact with customers, where suit and tie for men and dresses for women are expected.” The physical ambience “ranges from fair to pretty darn good, depending on whether you are at a 30-year-old building or a new one. Nowhere are we shabby.”
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MCI, Inc. 22001 Loudoun County Pkwy. Ashburn, VA 20147 Phone: (877) 624-1000 Fax: (212) 885-0570 www.mci.com
LOCATIONS Ashburn, VA (HQ)
THE STATS Employer Type: Public Company Stock Symbol: MCIP Stock Exchange: NASDAQ President and CEO: Michael D. Capellas 2003 Employees: 56,600 2003 Revenue ($mil.): $27,315
KEY COMPETITORS AT&T Sprint Verizon
EMPLOYMENT CONTACT global.mci.com/about/careers/
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Vault Guide to the Top Telecom Employers MCI, Inc.
THE SCOOP
Telecom giant MCI provides a broad range of voice, data, Internet and international communications services to corporate customers as well as local, long distance, wireless and data services to residential consumers and small businesses. MCI is the second-largest provider of national long distance (second only to AT&T) and operates in 65 countries. Since early 2001, it has been launching fixed-wireless services in cities across America (connecting local users to the phone network using wireless technology). But the lion’s share of MCI’s business is serving large companies with data and telephone access. MCI has roughly 35 percent of the market, with AT&T having 40 to 45 percent. In addition to serving businesses, MCI is the dominant deliverer of U.S. Internet traffic. The company carries as much as 50 percent of domestic Internet traffic over its network.
The rise and fall Since its founding in 1983 as a long-distance reseller in Mississippi, WorldCom grew rapidly through a series of acquisitions. In the 1990s alone, WorldCom was involved in about 60 mergers. One of those deals took place in February 1998 when WorldCom bought CompuServe, an AOL subsidiary. The purchase turned WorldCom into AOL’s largest network service provider. When WorldCom completed its $40 billion merger with telecom rival MCI later that year, it became the second largest telecommunications company in the U.S. The companies complemented each other because WorldCom had primarily serviced the business market, while consumers were MCI’s core customer base. In November 1999, still hungry, MCI WorldCom (as the company was then known) attempted to swallow Sprint for $115 billion. That deal, however, was later blocked by antitrust regulators. In mid-1999, MCI WorldCom’s stock was trading at an all-time high, above $60. But by mid-2000, as the rest of the stock market began to slide, the company’s stock began a precipitous fall, making it harder to make any new acquisitions. In 2001, WorldCom issued a separate tracking stock for MCI in an effort to reverse the parent company’s stock decline. WorldCom’s efforts to boost its stock price failed. In February 2002, the stock took another big tumble after the company sharply lowered its revenue and earnings projections for its WorldCom group for fiscal 2002. Investors got another dose of 82
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bad news the next month when the Securities and Exchange Commission announced it was investigating the company’s accounting practices as well as some loans it made to executives. Another worry was the company’s high debt, which had reached $30 billion by April 2002. By this point, MCI WorldCom’s stock was trading below $7. At the end of April, under mounting pressure, CEO Bernie Ebbers resigned and was replaced by Vice Chairman John Sidgmore, who remained at the company’s helm less than a year. It was during Sidgmore’s brief tenure (July 21, 2002, to be exact) that the company took the step of filing for bankruptcy. The current CEO Michael Capellas (formerly chief executive of Compaq and formerly president of HewlettPackard) took the reins from Sidgmore in November 2002.
New name, new headquarters, same company more or less Capellas wasted no time jumping in and trying to fix the giant telecom’s troubles. Immediately after being named to head WorldCom, he traveled to Ashburn, Va., home of the company’s MCI subsidiary. While there, he vowed to move the headquarters for the entire company to Ashburn and announced the possibility of eliminating the WorldCom name in favor of MCI. Those statements were to soon come true. In April 2003, the company became known as MCI and relocated its headquarters from Clinton, Miss., to Ashburn. Within a month of completing its bankruptcy proceedings, MCI plans to issue about 300 million new shares at about $25 each. The shares will begin trading on the Nasdaq.
Former CEO indicted After trying for more than two years to build a case, the federal government was finally able to indict former WorldCom CEO Bernard Ebbers in March 2004 on charges stemming from the multibillion dollar accounting scandal at the telecommunications giant. Ebbers was charged with securities fraud, conspiracy to commit securities fraud and making false filings to regulators. Scott Sullivan, WorldCom’s former chief financial officer, who had vowed to fight charges against him, had a change of heart; he pleaded guilty to three charges and agreed to cooperate in the case against Ebbers. The SEC continues to conduct its own civil investigation into WorldCom and more charges or complaints may be filed in the case. According to the indictment, Ebbers and Sullivan used illegal accounting moves to inflate earnings. The two chose to lie to investors and regulators rather than admit Visit Vault at www.vault.com for insider company profiles, expert advice, career message boards, expert resume reviews, the Vault Job Board and more.
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they had missed growth projections. Given the huge amount of debt the company had accumulated – more than $40 billion – a sharp slowdown in growth would have signaled to Wall Street that the company was in serious trouble.
A corporate scandal to end to all corporate scandals Two months after Ebbers’ April 2002 resignation, WorldCom announced it had uncovered nearly $4 billion in hidden expenses and ignited the beginning of what would become the largest corporate fraud in U.S. history. That fraud is now estimated at $11 billion. The company’s collapse wiped out $200 billion in shareholder value. Four former company executives pleaded guilty to criminal charges in a fraud investigation by the Justice Department and are helping federal prosecutors. In addition, former WorldCom chief financial officer Scott Sullivan and controller David Myers were arrested in August 2002 on charges of securities fraud, conspiracy and filing false statements with the SEC. Ebbers and Sullivan were also charged with 15 violations of state securities laws in Oklahoma. They are among six ex-WorldCom employees charged there in an accounting scheme prosecutors say cost state pension funds $64 million. Ebbers was also extended $366 million in personal, board of directors-approved loans and loan guarantees from the company. Ebbers later defaulted on the loans. A report issued by MCI in June 2003 said Ebbers fostered a poisonous corporate culture and said he was “aware, at a minimum, that WorldCom was meeting revenue expectations through financial gimmickry.” The report, produced by lawyer William McLucas at the request of the company’s new board, said Ebbers had been in meetings in which company officials discussed ways to artificially inflate revenue. A second report, by former Attorney General Richard Thornburgh for a bankruptcy judge in New York, described a corporate culture dominated by Ebbers and Sullivan “with virtually no checks or restraints placed on their actions by the board of directors or other management.” In 2003, a federal judge in New York approved a $750 million settlement between WorldCom and the Securities and Exchange Commission designed to repay investors who lost money in the fraud. WorldCom also has agreed to corporate reforms, including a court-appointed monitor and regular audits.
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Falling sales, prices Spending in the U.S. telecommunications sector, which totaled $339 billion last year, has slid by more than 4 percent since 2001, according to Red Bank, N.J.-based market researcher RHK Inc. The decline in spending is partly attributable to falling prices. The cost of a long-distance call has plunged to five cents a minute for some consumers from 32 cents in 1984, according to the U.S. Federal Communications Commission. Unfortunately for the industry, the decline began after phone companies invested heavily in new networks. MCI alone spent more than $30 billion on its 98,000-mile high-speed network, one of the world’s largest. While phone companies battle the glut of capacity, e-mail is eating into demand for long-distance calls. Unlike AT&T and Sprint, the No. 1 and No. 3 U.S. long-distance companies, MCI lacks a cellular service to cushion the loss of business to wireless providers. At the same time, Verizon and fellow local phone companies have signed up more than 35 million long-distance customers since the federal government opened the market to competition in 1996.
Through the looking glass Competitors are closely watching MCI’s actions and will use anything that hints at an ethical lapse to lure its customers. AT&T, Verizon and SBC have accused the company of improperly routing calls to avoid fees for using their networks. MCI has said its internal investigation found no evidence to support the allegations. As part of the resolution to a number of disputes between the companies including the callrouting matter, MCI will forgive $120 million in access fees owed by AT&T. AT&T agreed to drop claims related to the allegations, including a racketeering and fraud lawsuit it filed in Virginia in September 2003. The agreement is subject to bankruptcy court approval, and is scheduled for a hearing in March. When the call-routing allegations surfaced in July 2003, the U.S. General Services Administration announced it was barring MCI from new government contracts and said it may bar the company from future federal contracts unless it tightens internal financial controls and bolsters its ethics training. The federal government is MCI’s biggest customer, accounting for about $1 billion in annual sales. But after investigating, the agency later had a change of heart, and on January 7, the GSA said it would lift the suspension and instead monitor MCI for the next three years. That didn’t exactly close the books on the company’s government contract troubles, however. On February 9, 2004, the New Jersey Treasury Department barred the
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company from winning new contracts for as long as 18 months, citing charges against former employees, including CFO Sullivan.
More oversight Capellas and former SEC Chairman Richard Breeden, MCI’s court-appointed monitor, are implementing new governance policies – among them, that one director a year will leave the board and one new one will be appointed. No director will stay more than 10 years. Before the bankruptcy, some directors had lingered from the first days of WorldCom’s founding in 1983. In addition, all 54,000 MCI workers must complete an online ethics-training course. So far, more than 2,000 MCI managers and finance employees have gone through full-day ethics seminars. And to make sure someone is always on top of the company’s morals, in October 2003 Capellas appointed a chief ethics officer who will report directly to him: Nancy Higgins, former ethics vice president at Lockheed Martin.
Takeover target The bankruptcy, which wiped out about $35 billion in liabilities, leaves MCI with $3 billion in cash, more than $20 billion in annual revenue and $1.2 billion of operating income. MCI’s finances and 20 million customers make the No.-2 U.S. long-distance company an alluring takeover target, according to telecom analysts. The biggest factor prompting such speculation is the trend toward bundling telecom services. This convergence puts increasing pressure on companies like MCI, which has a good long-distance business, but is less well positioned to compete against competitors that can offer many bundled services. The ability of MCI to remain a stand-alone entity was dealt another blow in early March 2004 when a federal appeals court in Washington, D.C., blocked regulations issued by the Federal Communications Commission that would have made it easier for long-distance companies to compete in local telephone markets.
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GETTING HIRED
Job database For more information on hiring, visit the company’s career web site at global.mci.com/about/careers/. The site allows candidates to search available positions by location, function and keyword.
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Motorola, Inc. 1303 E. Algonquin Rd. Schaumburg, IL 60196 Phone: (847) 576-5000 Fax: (847) 576-5372 www.motorola.com
LOCATIONS Schaumburg, IL (HQ) Canada China Poland Singapore Taiwan United Kingdom
DEPARTMENTS Accounting Communications Engineering Management Sales
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THE STATS Employer Type: Public Company Stock Symbol: MOT Stock Exchange: NYSE President, COO, and Director: Mike S. Zafirovski 2003 Employees: 88,000 2003 Revenue ($mil.): $27,058
KEY COMPETITORS Agere Systems Ericsson Nokia
EMPLOYMENT CONTACT Phone: (847) 576-6316 Fax: (847) 632-3763 www.motorolacareers.com/
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Vault Guide to the Top Telecom Employers Motorola, Inc.
THE SCOOP
Call me on your Motorola Motorola is one of the world’s leading manufacturers of cellular phones, pagers and two-way radios. Its products are so ubiquitous that its name, in some areas of the world, has become synonymous with telecommunications. In China, for example, “Motorolas” has become a kind of slang term for cellular phones. But Motorola has also made a name for itself in semiconductors, networking, broadband and cable products. While the company has a global reach, not many know that its products have gone beyond terra firma as well. Motorola products have been to the moon, hitching a ride on the Apollo missions; to Mars aboard the Viking II and to Saturn, Uranus and Neptune on the Voyager I and II missions. In addition to this, Motorola products are part of NASA’s STARDUST program to collect materials from a comet hurtling through space.
Galvin-izing the company The company was founded by Paul V. Galvin in Chicago in 1928. (It was originally called The Galvin Manufacturing Corporation.) As the first manufacturer of twoway, hand-held radios, as well as a pioneering maker of semiconductors and car stereo equipment, the company has over the years earned more than 1,000 patents, making it one of the top three patent holders in the country. In the 1960s, Motorola began expanding overseas and shifting its focus away from consumer electronics. By the end of the 1980s Motorola had grown into the world’s top manufacturer of cellular telephones (a position it has since lost to Nokia).
Award-winning company Motorola has also won some awards over the years for its technical innovation. Motorola Labs has been named by Scientific American magazine as one of the “Scientific American 50” for breakthrough work in layering computer chips. The layering process, first announced in September 2001, allows inexpensive silicon and gallium arsenide – an expensive material that can transmit electrical signals at much higher speeds – to combine on one chip. The industry has been trying to combine the two materials for nearly 30 years in the hope of creating a less expensive, yet much
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faster chip. The breakthrough could result in cheaper and far more efficient microprocessors and consumer electronics products, industry experts have said. The company was also named one of the winners of the 2002 Baldrige Award for business excellence in December of that year. Motorola won in the manufacturing category. The Malcolm Baldrige National Quality Award, named for the late commerce secretary who served in the Reagan administration, was established by Congress in 1987 to boost the competitiveness of American companies. It goes to U.S. companies judged to be exemplary in the seven areas of leadership, strategic planning, customer and market focus, information and analysis, focus on human resources, process management and results.
Where the chips fall In July 2003, Motorola fell from the ranks of the world’s largest makers of semiconductors for the first time since the company built its original chip plant in 1959. The company fell from the top 10 ranking, according to a report issued by research firm IC Insights. The ranking was based on sales in the first six months of 2003. Motorola’s chip sales in the first half of 2003 fell 5 percent to $2.27 billion from the same period in the previous year, $300 million less than Taiwan Semiconductor Manufacturing, which was in 10th place, IC Insights said. It was the only chipmaker in the top 11 that registered a sales decline in that period. This comes on the heels of a year of bad news in 2002, when the company announced that due to market forces and continued restructuring, it was cutting 7,000 jobs and taking $3.5 billion in charges to restructure its business and write down the value of some of its assets. The company’s then-CEO Christopher Galvin said in a statement that the company was trying to resize its operations to where it was in the mid-1990s and that the company was not assuming that the rapid growth in the demand for its products seen in the late 1990s would return. And the bad news just kept coming. By mid-2002 Motorola also announced it was seeing a sales decline of between 5 to 10 percent for the year from the previous year. In all, Motorola said the job cuts are expected to save $100 million in pretax costs for the remainder of the year and produce annual pretax savings of $700 million by 2003. As part of its restructuring process, in November 2002 Motorola shut down its last production line at its Mesa, Ariz., semiconductor complex, ending 33 years of manufacturing at the site. Only a few hundred employees remained, down from 2,600 who worked there in 2001, when Motorola announced plans to discontinue manufacturing in the area. Motorola decided to close the site in response to the 90
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semiconductor industry downturn of the past two years. Employees displaced by the closing either took early retirement, moved to other company locations or were laid off with severance packages. Overall, Motorola’s semiconductor employment in Arizona has declined from about 10,000 in 2001 to the current 6,000.
Bye-bye Galvin Grandson of the company’s founder, and Motorola CEO Christopher Galvin stepped down under increasing pressure in October 2003 after the company lost $6.4 billion in two years under his watch. Thousands of employees were laid off as Galvin sold off businesses and moved manufacturing overseas. Galvin brought in outsiders Edward Breen, who has since left to run Tyco International, and former GE exec Mike Zafirovski, now Motorola’s president. Breen and Zafirovski helped refocus Motorola and by recharging the company’s biggest unit, cellular telephones.
The long climb back to profitability In 2001 Motorola posted an operating loss for the first time since 1930. Although it predicted it would return to profitability by 2002, that April the company admitted that 2002 would be another money-losing year. By the third quarter of 2002, Motorola also saw its global market share decline, primarily due to delays in the availability of two new models that were expected to ship in volume in the early part of the quarter. The end of the year didn’t bring much help to the beleaguered company, as sales had decreased to $26.7 billion compared with $29.9 billion in 2001. Although sales remained flat for 2003, Motorola began to reap the rewards of its costcutting efforts. The company, which has shed more than 60,000 employees worldwide since 1997, posted four consecutive quarters of profitability and reported a net income of $893 million for the year. This is the same company that fell to a $2.5 billion loss in 2002. Not relying solely on layoffs, Motorola has improved efficiency by closing its semiconductor manufacturing plants and spinning off microchip maker Freescale Semiconductor. Motorola, the majority-owner of Freescale, plans to divest all of its interest through a public offering in the future. Additionally, Motorola is saving money by transferring some its production to contractors and trimming down its sprawling IT department to focus on core operations, such as broadband and optical communications products. In 2003, the company expanded its wireless reach by becoming the majority owner of broadband equipment manufacturer Next Level Communications.
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No longer rudderless While many experts predicted that Motorola’s current president Mike Zafirovski would get the nod, the company named former Sun Microsystems president Edward Zander to the vacant CEO spot, in January 2004. The appointment ended the Galvin family’s role in the company’s top spot. Motorola has long had the reputation of being a slow and inward-looking corporation, and investors seem to think Zander is the perfect antidote. After a mere four months in charge under Zander’s leadership, the company’s stock rose some 40 percent. For the first quarter of 2004, Motorola’s sales were up 42 percent. Net profits tripled, while operating earnings were six times higher compared to the year-earlier quarter. The good news has continued – in the second quarter of 2004 Motorola recorded sales of $8.7 billion, up 41 percent compared to the corresponding period of 2003. Pre-tax earnings totaled $800 million, beating the previous year’s numbers by a whopping 614 percent. As good as the numbers look, Motorola still reported a net loss for the quarter due to charges related to the Freescale Semiconductor transaction. However, the company wasn’t done wheeling and dealing and announced it had acquired embedded computing products provider Force Computers, in the summer of 2004. Motorola looks overseas for more than half of its revenue. Already the market leader in Latin America and one of the top contenders in Asia, the company is looking increasingly toward these two markets for expansion. Motorola is facing stiff competition in emerging markets, primarily from Nokia, Samsung, Siemens and Sony Ericsson, and to keep up it’s constantly rolling out new and improved products. Motorola has introduced its first handset with Windows operating systems and expanded its line of Bluetooth supported wireless products. If you want some bling with your ring, Motorola has partnered with Phat Farm (the retail empire of the grand wizard of hip hop Russell Simmons) and Bloomingdales and created the Baby Phat i833, complete with a diamond encrusted external display.
GETTING HIRED
How to apply Motorola’s operations are highly de-centralized and organized into several different divisions. Motorola’s career web site, located at www.motorolacareers.com/, provides information about current opportunities in each of these units. Applicants 92
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should be careful to direct their resumes to the appropriate one. There is also a list of recruiting events that the company attends posted on the site, which candidates should check frequently for potential updates. Motorola hires top MBAs primarily into strategy/corporate planning and marketing positions. In marketing, Motorola utilizes the traditional brand management structure, with MBAs starting as assistant marketing managers. Both internships and full-time positions at Motorola can take MBAs around the world. Incoming employees “often have the opportunity to go on rotational programs to get a feel for the different business units before choosing one to work in permanently,” according to an insider.
Motor-share the wealth “Motorolans” seem generally satisfied with the compensation and benefits offered by their company. “They have a program called Motorshare,” says one contact, “where you could buy shares of the company” at a discount. One drawback is that not everyone can participate in the program, however. “People from mid-management up had stock options, anyone lower in the pecking order had to wait to move up.” In general, one contact describes the benefit package as “great. You get gym membership at the company gym, and if they didn’t have one at your location they would subsidize your membership at another gym.” “We had a good 401(k), [and] although the options were limited, the company would match up to 2 percent of your salary,” says one insider.
OUR SURVEY SAYS
Disparate divisions, united by company pride Motorola is an “engineering and product-oriented” company that encourages “creative solutions to difficult problems.” While those in finance and marketing sometimes feel that the technical staff keeps them “at arm’s length,” everyone appreciates the “prestige of working for a company whose name transcends language barriers.” Employees say that Motorola’s decentralized organization “occasionally causes communication difficulties” but also “allows for a significant degree of departmental autonomy without excessive red tape.” The state of employee/management relations “varies by business unit. The larger business units tend to follow very antiquated [models]." One former marketing rep was impressed Visit Vault at www.vault.com for insider company profiles, expert advice, career message boards, expert resume reviews, the Vault Job Board and more.
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with the somewhat hands-off approach the company took with those in the trenches I was in a relatively small unit and it was very entrepreneurial, but since the company is so big and we had sales teams all over the world, you always had the feeling of working for a small company.” Another aspect of Motorola this contact appreciated was that although there are a number of sales teams all trying to sign up new clients, as part of a big company, it was a very cooperative environment. One drawback, according to another contact, is that many units in the company tend to have a fairly large percentage of long-time employees who were not as dynamic as younger, or newer employees. “There’s this unwritten ‘10-year’ policy where after 10 years at the company, you really can’t get fired unless you do something drastic. They just don’t fire you after that, instead, if there’s problem they try to relocate you in the company.” Regardless of this, this contact admitted that their relationship with managers was very open door, they were always open to suggestions.
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Nextel Communications 2001 Edmund Halley Drive Reston, VA 20191 Phone: (703) 433-4000 Fax: (703) 433-4343 www.nextel.com
THE STATS
Reston, VA (HQ)
Employer Type: Public Company Stock Symbol: NXTL Stock Exchange: NASDAQ President, CEO and Director: Timothy M. (Tim) Donahue 2003 Employees: 17,000 2003 Revenue ($mil.): $10,820
DEPARTMENTS
KEY COMPETITORS
Accounting Management Marketing
Cingular Wireless T-Mobile Verizon Wireless
LOCATION
EMPLOYMENT CONTACT www.nexteljobs.com
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THE SCOOP
Talking on air Reston, Va.-based Nextel Communications is a leading provider of integrated, wireless communications services and has built itself into the largest all-digital, wireless network in the country. The company has used the specialized mobile radio (SMR) spectrum to build its position as a leading mobile phone operator in the U.S., where it has 10.6 million subscribers. Nextel and its subsidiary, Nextel Partners, Inc., currently serve 293 of the top 300 U.S. markets.
Short, but eventful, history The company can trace its history back to April of 1987 when its predecessor, Fleet Call Inc., was founded. By 1992, the company had grown large enough to file for an initial public offering. The next year, the company changed its name to Nextel Communications, Inc. In July 1994, the company embarked on a rapid-fire growth spurt, transforming Nextel into the wireless giant we know today. That month, Nextel got together with OneComm, formerly CenCall Communications, and announced a merger to form a company to provide service to all of the top 50 U.S. markets. A month later, the company bought all of Motorola’s SMR radio licenses in the United States, providing Nextel with significant spectrum rights in these markets. In October, Nextel closed a merger with Questar Telecom, Inc. and a subsidiary of Advanced Mobilcom, Inc., giving Nextel ownership of SMR properties in San Diego, Las Vegas and other western markets. Over the next few years, the company signed agreements to expand its digital wireless service in markets across the United States and Canada, and in October 1997, signed up its one millionth customer. In nine months, that figure had doubled to two million customers. Since then, the company has steadily grown its customer base to over 10 million subscribers in 2004. In January 2003, the company acquired NeoWorld Communications, Inc. from Boston Millennia Partners for about $270 million. The acquisition of NeoWorld gave Nextel licenses in the 900 mega-hertz spectrum in the top 12 U.S. markets.
The real McCaw Craig O. McCaw, the billionaire investor who in December 2003, resigned from the board of Nextel, looms large in the company’s history. His involvement with the 96
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company began in 1995, when he sold McCaw Cellular to AT&T for $11.5 billion, and then invested about $1.6 billion in Nextel Communications in exchange for a stake in the company. That infusion of cash helped Nextel take its digital wireless service national. At the time of the investment, Nextel was burdened by debt and by the poor quality of two-way radio equipment purchased from Motorola, losing hundreds of millions of dollars annually and searching for billions to build out service in the cities where it had licenses. McCaw jumped right in, relying in part on Motorola’s commitment to improve the system if he became involved. By 1999, Nextel’s customer base had more than doubled, its stock was up 600 percent, it was branching out into foreign markets and Microsoft had decided to invest $600 million to develop Nextel Online, an Internet service for Nextel customers. As a result, McCaw and his fellow investors were sitting on a $3.4 billion gain on their investment. In 2001, McCaw advised the company of his plan to exercise options covering an aggregate of 17 million shares of Nextel common stock. Of those 17 million shares, 15 million would be acquired directly from the company for $277.5 million in accordance with the original investment agreement. As part of his original investment, McCaw got the rights to three of the company’s 11 board positions as long as his stake remained at least 5 percent. But Nextel shares have been on the rise over the past few years after suffering a post-bubble drop, and McCaw sharply reduced his investment in the wireless service provider. Finally, in December 2003, McCaw announced that he was stepping down from Nextel’s board of directors to pursue other opportunities, although he will maintain his 5 percent share in the company.
Nextel Partners Nextel Partners, the only U.S. affiliate of Nextel, holds exclusive rights to provide Nextel’s digital wireless communications services in many small and mid-sized U.S. markets. Nextel owns approximately 32 percent of Nextel Partners, which provides digital wireless communications services under the Nextel brand name in mid-sized and tertiary United States markets. Nextel Partners has the right to operate in 58 of the top 200 metropolitan areas in the United States. For 2003, the company saw revenue of $1 billion, a marked increase over revenue of $670 million in 2002. Founded in 1999, Nextel Partners is licensed to operate in 30 states in the U.S., and currently has about 1 million subscribers. It has also announced plans to open 30 retail stores in 2004, expanding its presence from 40 retail locations already in Visit Vault at www.vault.com for insider company profiles, expert advice, career message boards, expert resume reviews, the Vault Job Board and more.
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operation. Wireless pioneer Craig McCaw owns a 6 percent stake in the company, while Microsoft cofounder Bill Gates owns 5 percent and Motorola owns another 5 percent.
First in new products In 2001, Nextel – working with Motorola-introduced the first Java technologyenabled wireless phones in the United States. Nextel also launched the Motorola iBoard in 2001, allowing customers to compose e-mail, manage address books and calendars, and use Java-enabled applications – all from a wireless phone utilizing a fold-away, full-sized keyboard. In late 2002, Nextel successfully launched the only wireless, handheld device that offers a full suite of wireless mobile solutions: all-digital cellular, Direct Connect digital service, text and numeric messaging, e-mail, Java technology and Nextel Online service. The device, the BlackBerry, has been a big success, especially among corporate users. Nextel also owns approximately 36 percent of NII Holdings Inc., which provides wireless communications services primarily in selected Latin American markets. In May 2002, NII Holdings filed a voluntary petition for reorganization under Chapter 11 of the United States Bankruptcy Code, and by November of that year, had emerged from bankruptcy. Nextel’s key service has been Nextel Direct Connect, the long-range wireless service that allows communication at the touch of one button. Direct Connect gives customers the ability to instantly set up a conference on either a private (one-to-one) or group (one-to-many) basis within their local calling area. In 2002, Nextel significantly improved its Direct Connect service by expanding Direct Connect nationwide, allowing any two Nextel customers to instantly contact one another from anywhere on the Nextel national network. Also in 2002, Nextel rolled out its wireless business solutions initiative, designed to address the real-time needs of its business customers. Accessible via Nextel’s wireless handsets, as well as handhelds and other devices, Nextel wireless data solutions enable quick response among workers in the field and streamline operations through faster exchanges of information by integrating with corporate intranets and back-office systems.
Big shots In July 2003, company president and CEO Tim Donahue was honored as a finalist for the 2003 Entrepreneur Of The Year award by Ernst & Young and was named Master Entrepreneur Of The Year at the Greater Washington awards banquet. 98
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Perhaps as a reward, just one month later, the company announced that it had entered into a new employment agreement with Donahue, under which he will continue to lead the company until at least 2006.
Uncertain future In December 2004, Nextel and Sprint tentatively agreed on key terms for a $35 billion merger that would join the two companies into the third-largest cell phone operator behind Cingular Wireless and Verizon Wireless, with a network of 39 million subscribers. According to the terms of the plan, Sprint’s CEO Gary Forsee would become the CEO of the new combined company, with Nextel’s CEO Donahue filling the role of executive chairman. Corporate headquarters would be moved to Reston, Va., where Nextel is based, with operating headquarters in Overland Park, Kan., where Sprint is based. The new company would also have a 50-50 split among board members.
GETTING HIRED
On the Web Nextel has its own web site for employment related queries, www.nexteljobs.com, where prospective employees can search for open positions at the company and submit their resumes electronically. Despite having its own site, the company doesn’t supply any information concerning internships or benefit packages, however.
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Nokia Corporation Keilalahoentie 4 PO Box 226 Espoo, 02150 Finland Phone: +358-7180-08000 Fax: +358-7180-38226 www.nokia.com
LOCATIONS Espoo, Finland (HQ) Canada China United Kingdom United States
THE STATS Employer Type: Public Company Stock Symbol: NOK Stock Exchange: NYSE Chairman and CEO: Jorma Ollila 2003 Employees: 51,359 2003 Revenue ($mil.): $37,031
KEY COMPETITORS Ericsson Motorola Siemens
EMPLOYMENT CONTACT DEPARTMENTS
www.nokia.com
Engineering Management Marketing
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THE SCOOP
The big Finn Wireless giant Nokia has managed to build itself into a force to be reckoned with in the mobile handset market. The company is the world’s No.-1 maker of cell phones – beating out rivals such as Motorola, Siemens and Samsung for that honor. In late September 2003, Nokia officially split its business into four major divisions: mobile phones, multimedia, networks, and enterprise solutions, each aimed at vastly different market opportunities. The mobile phones division develops phones for customer segments in over 130 countries. Nokia’s multimedia products combine imaging with games, music and other content, reflected in products such as the 7700 media device, the 6600 imaging phone, the 7600 3G phone and the N-Gage handheld game deck. Enterprise solutions provides businesses with mobile phones, and focuses on various types of business equipment, IP network security and other mobile connectivity products. The company also has a venture capital division, which focuses on investing in mobile technology companies.
From pulp to PDAs Nokia’s history can be traced back to a wood pulp mill established by Fredrik Idestam in Finland in 1865. The company really started to take off around the turn of the century, however, as it began to get into the electricity generation business. At about the same time, another young company, The Finnish Rubber Works, acquired a controlling interest in Nokia Ab in 1918. In 1922, The Finnish Rubber Works bought the Finnish Cable Works, which gave the company a virtual monopoly on telephone cables throughout the country. In 1966 Nokia finally began to assume the form we see today when Nokia, The Finnish Rubber Works and the Finnish Cable Works were officially merged into the forestry company Nokia Ab. In reality, these companies had been operating together as a loose group since 1922, after the Rubber Works had acquired a majority in both the forestry company and the Cable Works.
Mid-century growth After the big 1966 merger, Nokia ramped up the international focus of each of its business areas: rubber, cable and forestry industries, electricity generation and electronics. The company then turned its eye on expansion through corporate Visit Vault at www.vault.com for insider company profiles, expert advice, career message boards, expert resume reviews, the Vault Job Board and more.
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acquisitions – becoming the European market leader in several fields, such as the rubber industry and TV set manufacturing. Although the new Nokia group already had five businesses, it continued to branch out into hunting rifles, plastics and the chemical industry. The electronics business, which grew under the Cable Works moniker to be a viable business in its own right, was split into two businesses: consumer electronics and information technology.
Cold war deals The growth of the telecommunications industry during the 1970s and 1980s saw the increased exportation of Nokia products to the then-Soviet Union. At the same time, however, the company’s telecommunications business was growing in other markets as well, particularly in the United States and Asia. During the 1980s, trade with the Soviet Union was by far the biggest contributor of profits within the Nokia group of companies. The dependency on the shaky Soviet market was a cause concern for Nokia’s management, however, and as a result, the company stepped up its efforts to establish more markets in the West.
More acquisitions During the 1980s, Nokia made a decision to concentrate its acquisition strategy in western Europe. With Kari Kairamo serving as CEO, the drive toward internationalization became the prime motivating factor within the company, especially for the electronics division. The strategy was so successful that by 1987, consumer electronics was Nokia’s largest business, and the company became the third-largest manufacturer of TV sets in Europe. The company also moved toward the west, joining both domestic and European industrial and economic alliances during the decade. By the end of the decade, however, the death of visionary leader Kari Kairamo and a worsening economic environment forced the company to cut back some of its operations. Kairamo’s successor, Simo Vuorilehto, set into motion an extensive program of financial restructuring, and while Nokia’s other businesses were suffering heavy losses, the relatively young telecommunications group began to emerge as a sleeping powerhouse ready to assert its growing importance. By the early 1990s, Nokia had all but given up on its forestry and electricity businesses and the consumer electronics, rubber and cable businesses were all sold off by 1996. The company did hang on to a 20 percent stake in its tire business for a few years, though. The final
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departure from car tire and computer monitor manufacturing, however, did not take place until the 2000s.
A new beginning In 1994, CEO Jorma Ollila laid out the key elements of Nokia’s new strategy: dump stagnant businesses and focus on telecommunications. It seems to have worked, since today, the company has more than 51,000 employees worldwide. The company racked up sales of over $37 billion in 2003, up from $31.5 billion in 2002, and the company currently holds about 40 percent of the global mobile phone market. In April 2003, the company announced a cost-cutting plan that will improve profitability, and further strengthen its leadership position in the mobile infrastructure business. The planned measures include focusing on research and development programs, a reduction of approximately 1,800 employees, and fine tuning of the Nokia Networks organization to improve efficiency and effectiveness. Up to 1,100 of the 1,800 planned personnel reductions affected its Finnish operations, while the remainder was divided among other countries. The reductions were made in R&D, operations, sales and marketing and in support functions. These changes have gone all the way to the top. In late September 2003, two nonFinnish nationals were appointed to senior managerial posts for the first time in the company’s history. American Rick Simonson was appointed senior vice president and CFO, while Norwegian Hallstein Moerk became senior vice president, human resources. Up until now, the company’s management has been solidly Finnish even though, since 1998, English has been the language spoken in managerial meetings. The company also announced that its former CFO, Olli-Pekka Kallasvuo, will run the mobile phones unit, which, in the past, has accounted for the biggest share of the company’s sales.
Cracking the video game market In October 2003, Nokia reported that its “N-Gage” portable game decks had made a strong debut. “We’ve sold around 400,000 N-Gage in the first two weeks,” senior vice president entertainment and media at Nokia Mobile Phones, Ilkka Raiskinen, told Reuters. The number refers to models Nokia has sold to shops and other retail outlets since the launch on October 7th. The 400,000 units roughly equal the total number of mobile handsets that Nokia produces in a single day.
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The company has set a goal of selling between six and nine million N-Gage devices before the end of 2004, as it challenges the dominance of Japan’s Nintendo – the leader in the portable gaming market with its GameBoy Advance. Nintendo has said it aims to sell some 20 million GameBoy Advance units in its current fiscal year that started in April 2003. N-Gage sells for around $300, as opposed to about $100 for GameBoy – but the difference is that the N-Gage also doubles as a cell phone and an FM radio. Bluetooth wireless technology also allows N-Gage users in close proximity to one another to play each other wirelessly, or they can compete on a phone network against any other N-Gage owner in the world. N-Gage is the first portable game deck on which players in different locations can battle against each other over the mobile phone network. The Finnish firm is targeting new and smaller markets like the portable games segment because handset revenues have gone flat.
New gadgets But the company isn’t just moving forward with new games. In September 2003, Nokia also released six new imaging devices, including new phones, necklaces, digital-picture frames and a kaleidoscope. The 7600 mobile phone is a slanted palmsized device with a full-color screen, video and digital camera and up to four hours of talk time. Other features include an MP3 player, a multimedia player and support for Java applications. The phone also lets users send and receive video clips and digital photographs either through a Bluetooth radio, USB port or infrared. In addition, two versions of a Nokia digital picture frame can receive and display photographs from other Nokia products, as well as those of other manufacturers. The SU-4 can receive photos through infrared, store up to 50 pictures and display them as stand-alone images or as part of a slideshow presentation. It hit the market in early 2004. The company also released two versions of a necklace that can receive and display images through the infrared capability of a Nokia phone. Both necklaces can store up to eight images and include controls to delete the pictures. One is only available in the form of a necklace, the other can be worn as a wristwatch as well and should appear on the market in the first quarter of 2006. A portable steel, 2.6-ounce kaleidoscope that accepts pictures through infrared is still on the drawing board for release sometime early 2006, as well. The mobile handset industry and Nokia Mobile Phones experienced a record year in 2003. With volume growth of 16 percent, the mobile phone market achieved record volumes of 471 million units for the year, and culminated in high fourth quarter volumes of 145 million units. Nokia Mobile Phones reached not only record profits, 104
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but also higher-than-ever sales and volumes (selling some 179 million phones). In addition, the company slightly increased its mobile phone market share to just above 38 percent for the full year. Despite the success, Nokia’s profits were down by 2 percent compared to 2002. Increased results in the emerging Asian market were offset by slower sales in Europe and the U.S., and currency conversion losses caused by the weak dollar. The U.S. accounts for about 20 percent of Nokia’s sales. With Nokia’s reorganization came a broader focus. Known for its cellular phone capabilities, the company is expanding its third generation (3G) wireless networking reach. During 2003, Nokia struck seven new network deals in countries as diverse as Bahrain, France, Hong Kong and the U.K., in an attempt to catch up with rival and wireless network infrastructure leader Ericsson.
2004 and beyond As part of the company’s ongoing portfolio renewal, Nokia introduced 11 new mobile devices during the second quarter of 2004, bringing the total number of products announced during the first half to 18. During the second quarter, Nokia started selling eight new products, including the 6230 and 6610i camera phones and the fashion-category Nokia 7200 clamshell phone. Sales for the quarter totaled $8.1 billion which is almost identical to the number it posted for same quarter of 2003. The company maintains its strong position in China and Latin America but sales in Europe (its premier market) have been below expectation. As competition increases in the mobile phone industry, Nokia’s market share has dropped to 31 percent.
GETTING HIRED
Opportunities abound Those seeking employment at Nokia can consult the company’s web site at www.nokia.com where they can browse job opportunities and available internships across the globe and apply online. The company has had operations in the United States since 1975 and, as of January 2004, employs about 6,600 (some 20 percent of Nokia’s total workforce) people in 13 offices across the country. Nokia offers flexible opportunities for students worldwide, although most of the positions are based in Europe. Assignments in three- to 12-month increments are available year-round, including full and part time and thesis work. The recruitment
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process goes through the Web and all jobs at the company are posted on the web site. The job listings are updated regularly and if you can’t find a matching opportunity right away there is an open application form, which keeps you in consideration for future opportunities.
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Nortel Networks Limited 8200 Dixie Road Suite 100 Brampton, Ontario, L6T 5P6 Canada Phone: (905) 863-0000 Fax: (905) 863-8408 www.nortelnetworks.com
LOCATIONS Brampton, Ontario (HQ) Argentina Austria Belgium China Czech Republic France Hong Kong Hungary Ireland Pakistan Romania Russia Spain Sweden Thailand United States
THE STATS Employer Type: Public Company Stock Symbol: NT Stock Exchange: NYSE CEO and Director: William A. (Bill) Owens 2003 Employees: 36,960 2003 Revenue ($mil.): $9,807
KEY COMPETITORS Alcatel Cisco Systems Lucent
EMPLOYMENT CONTACT nortelnetworks.com/employment/ careers
DEPARTMENTS Accounting Engineering Finance Management Sales
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Vault Guide to the Top Telecom Employers Nortel Networks Limited
THE SCOOP
Northern exposure Nortel Networks, based in Ontario, Canada, makes switching, wireless and optical systems used by telephone carriers and data service companies. Nortel is one of the largest telecom equipment manufacturers in the world; it also makes products devoted to wireless communication, including cellular base stations, and makes systems that move “packets” of data.
Dialing up the past Nortel’s story begins north of the U.S. border in 1881 when Charles Fleetford Sise, a New England sea captain, arrived in Montreal to start The Bell Telephone Company of Canada. Sise got off to a rocky start: his domestic equipment supply was cut off when James Cowherd, operator of the world’s first telephone manufacturing plant, died of tuberculosis. Worried that he would not find another supplier and would thus lose his Canadian patent rights, Sise decided to make his own telephone equipment. A year later, the manufacturing branch of The Bell Telephone Company of Canada was born, and became the Northern Electric and Manufacturing Company Limited in 1895.
Technology marches on For 50 years, Northern Electric primarily made telephone equipment for Bell Canada, and also built television sets and radios. With the introduction of the electronic telephone switch during the 1960s, Northern Electric and Bell Canada decided to combine their research and development divisions and get a jump-start on the rapidly changing telecommunications market. The new R&D entity, called Northern Telecom, developed its first electronic switch, the SG-1, in 1972. But the electronic switch quickly became outdated with the arrival of digital technology. Northern Telecom sold its first digital switch in 1977. With the breakup of AT&T five years later, the company witnessed a decade of explosive growth. The company is now called Nortel Networks and operates in over 150 countries across the globe.
Beyond the telephone Throughout much of the 1990s, Nortel sought to reinvent itself as not merely a maker of telephone equipment, but a leader in global communications and data networking 108
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technology. Taking advantage of the 1996 deregulation of the telecommunications industry, Nortel sought to supply telephone companies with integrated networks, developing switches that can transmit packages of voice, video and Internet data over traditional phone lines.
Expansion and restructuring The U.S. accounts for about half of Nortel’s sales today; and like most other techcentered companies, the company has actively pursued markets in Asia and Latin America. The company has also sought growth via acquisition. In June 1998, Nortel bought Bay Networks, Inc. in a $7.7 billion deal. Bay Networks – itself the product of a difficult merger – had struggled to turn a profit and had little experience in the fast-growing public carrier market. Despite lower-than-expected growth in 1998, Nortel officials insisted they would make the merger work. The company cut 3,500 jobs worldwide and restructured operations. Nortel divided its data networking business into two units: one dealing with telephone companies and the other with corporate customers. A string of acquisitions continued through the end of the 1990s and into the new millennium, as Nortel grew ever larger and branched into new arenas such as fiber optics.
The tech industry mess But by 2001, the telecom industry found itself pressured from all sides. The tech bubble had burst, and as dot-coms faded and companies reined in their spending on new technology amid a recession, telecommunications equipment makers, including Nortel, suffered. Nortel’s revenue declined precipitously, from $30 billion in 2000 to $17 billion in 2001 – and has continued to fall, although not by nearly as much as it had previously. By the dawn of 2004, the company still hadn’t fully recovered. For the year 2003, revenue slipped to $9.8 billion, compared to $10.5 billion for 2002.
A new chief In November 2001, the company got a new chief executive, as John Roth stepped down from the post that month. Frank Dunn, who had been with the company in various roles since the late 1970s, assumed the CEO mantle and quickly began to slash jobs. He also began to outline a program aimed at restoring his beleaguered company to profitability. In May 2002, the company announced that it would realign its businesses. The company said it would seek to sell its unit devoted to parts for
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Internet-based optical networks. As a result of the realignment, which was completed in Fall 2002, the company ended up cutting about 3,500 jobs.
A string of losses, but some improvement In July 2002, the company reported losses for its second quarter. Nortel lost $697 million as revenue slipped 40 percent to $2.8 billion from the previous year. Nortel added that it would “actively review” its cost structure and seek to reduce costs further. In August, Nortel sold an office complex based in Santa Clara, Calif., for $24 million, less than half of its asking price. Despite all the grim-sounding news, things have started to improve at the company, and by the end of 2003, the company announced that it was No. 1 globally in the soft switch market and in carrier packet gateway ports shipped for the fourth quarter and the entire year of 2003, according to reports from Synergy Research Group. Nortel had a 38 percent share of the global softswitch market in 2003, almost 30 percentage points higher than the nearest competitor, according to SRG. This included a 50.8 percent share in the fourth quarter. SRG also reported that Nortel had 42 percent of all carrier packet voice gateway ports shipped in 2003, a 9-percentage point increase over 2003 and nearly double the nearest competitor. The company was also the global leader in high density VoIP gateway ports shipped in 2003 with a 53 percent share.
Big contract In September 2003, the company announced that Verizon Wireless had signed a multi-year agreement with Nortel Networks – estimated to be worth $1 billion – for wireless infrastructure technology, including expansion and upgrade equipment for its nationwide, third-generation voice and data network. In addition to this, in February 2004, the company’s chief executive Frank Dunn told a meeting of investors and analysts that Nortel may begin to use acquisitions to fill out its product offerings, but he favored the idea of partnerships and alliances. “Will we do some acquisitions, maybe, but I think you will clearly see us driving down the partnership mentality on a much broader scale than you’ve ever seen in the past,” he said. Despite this, he warned that the firm’s gross margin, which fell to 48 percent in the fourth quarter 2003 from 52 percent the previous quarter, is likely to remain under pressure in 2005 as the firm spends to support the introduction of new technologies to its customers. He added that the margin should widen over the longer
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term, as its business becomes more like that of a software company than a traditional hardware maker.
Settling up In March 2004, Colombia’s state-owned telecommunications firm, Telecom, agreed to pay Nortel $80 million to settle a long-running dispute over joint-venture contracts that went sour, Columbian President Alvaro Uribe’s office announced. Two years before, Colombia had paid Nortel about $52 million to settle a dispute over different joint-venture deals that also failed. The latest agreement provides for Telecom to pay Nortel the $80 million on May 7th, at which time Nortel would transfer ownership of 611,000 telephone lines it had installed for Telecom in the 1990s. According to the Columbian government, Nortel was initially demanding some $638 million in compensation, but agreed to the $80 million settlement.
GETTING HIRED
Hiring process The company provides a host of job search functions on its career site, www.nortelnetworks.com/employment/index.html. The site, hosted by Monster.com, allows users to search for positions by keyword, location and job category. There is also information about internships, although most opportunities look to be for Canadian high school and university students. The company also has a “co-op placements” program. Nortel hires students in the United States and Canada to work in the company’s offices in Alpharetta, Ga.; Billerica, Mass.; Calgary, Montreal; Ottawa; Raleigh, N.C.; Richardson, Texas; Santa Clara; or Toronto. Students can apply for internships and the co-op program directly through the web site.
OUR SURVEY SAYS
Laid-back atmosphere, but hardworking Nortel is less hierarchical than other top employers, insiders say. Insiders appreciate the company-wide “open door policy.” One source describes the company HQ as “a Visit Vault at www.vault.com for insider company profiles, expert advice, career message boards, expert resume reviews, the Vault Job Board and more.
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cube city.” “There are no offices,” that contact explains, “they do have cube-offices, where they put doors on high-walled cubes, but that’s about it.” The company insists that some employees do have offices. The relaxed atmosphere extends beyond an open-door culture. “It’s very laid-back,” says one insider. That contact explains why. “It’s the dress code, number one; and number two, the hours are very flexible. People come in at all different times.” As for the dress code, says one contact, “in the summer, I see both men and women wearing shorts to work all the time. Normally, though, you’ll see a lot of blue jeans, T-shirts, polo shirts, Dockers, sneakers, loafers, and stuff like that.” Explains another insider about the dress code: “It’s shorts and T-shirts. I mean it’s really taking business casual to an extreme.” This doesn’t mean that Nortel employees don’t work hard. Reports one contact: “Nortel, unfortunately, seems to cultivate workaholics. It all depends on what your ambition is. If you want to be a director or a VP, I can tell you that 40-hour weeks won’t get you there. If you’ll put in 60-hour weeks you’ll find that people will give you more than enough to do for 60 hours.” On the upside, “alternative work schedules, work at home, and responsible part-time work are usually available to help us balance our work life and personal life.”
Great training Perks at Nortel range from a generous 401(k) plan with 100 percent company match to health club memberships for some employees. Employees also praise the company’s emphasis on training and the recognition of hard work. “People come first,” gushes one employee. “As employees, we get every tool we need to do our work. Nortel encourages everyone to continue training and learning. Nortel is also a company that rewards employees who peform beyond expectations.” Adds another insider, “Nortel has great training and training is taken very seriously. So your personal and professional development are quite assured.” One former Bay Network employee waxes enthusiastic about the work itself: “I would say that [the company’s] influence on the industry is on the upswing. You can really make an impact on the industry here.”
Good diversity Nortel gets high marks for its treatment of women and minorities, though few are represented in upper management. “Looking at the corporate officers will show a staff of mostly white men,” observes an insider. “On the other hand, we do have 112
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women and racial minorities quite well represented throughout the ranks.” Reports one insider: “In R&D there are fewer women, but everyone is respected on equal grounds.” However, notes that contact: “in finance and marketing, the ratio of men to women is about half and half.” The company recently sponsored a Diversity Day, led by a senior VP. Employees were bused to the off-site event and were treated to “food, ethnic music and dance, and booths offering supporting information especially for women, minorities and gays. The keynote speaker was Coretta Scott King.”
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QUALCOMM Incorporated 5775 Morehouse Drive San Diego, CA 92121-1714 Phone: (858) 587-1121 Fax: (858) 658-2100 www.qualcomm.com
LOCATIONS San Diego, CA (HQ) Germany India
DEPARTMENTS Engineering Human Resources Management
THE STATS Employer Type: Public Company Stock Symbol: QCOM Stock Exchange: NASDAQ Chairman and CEO: Irwin Mark Jacobs 2003 Employees: 7,400 2003 Revenue ($mil.): $3,971
KEY COMPETITORS Nokia Samsung Electronics Texas Instruments
EMPLOYMENT CONTACT Phone: (619) 658-JOBS E-mail:
[email protected]
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Vault Guide to the Top Telecom Employers QUALCOMM Incorporated
THE SCOOP
Market leader Digital cell phone technology pioneer QUALCOMM was founded by college professors Irwin Jacobs and Andrew Viterbi in San Diego, Calif., in 1985. The company has seen its share of ups and downs as the tech market has gone through its own growth and contractions over the last several years. But through it all, QUALCOMM has remained strong. By the end of 2003, the company had 7,400 employees and saw yearly sales of $3.9 billion, up form $3 billion in 2002.
Today, CDMA, tomorrow, the world! QUALCOMM built a critical niche for itself in the wireless communications market by developing a technology for transmitting digital information called code-division multiple access (CDMA). Originally developed by the U.S. government, CDMA enables the transmission of much greater data over cellular phones than is possible with other technologies. CDMA currently stands as the world’s second most widely used wireless technology standard. QUALCOMM supplies about 90 percent of the chips for CDMA phones worldwide and earns a royalty on each phone sold. After years of uncertainty, CDMA technology finally gained wide acceptance as the cell phone technology of choice (at least in America). Eager to capitalize on this development, the company sold its handset manufacturing and wireless infrastructure businesses – two steps crucial to the acceptance of CDMA – to concentrate on chip manufacturing based on CDMA technology, satellite communications for truckers called OmniTRACS, and Internet e-mail client software called Eudora. In response, in 1999 grateful investors made QUALCOMM the best-performing stock on the S&P 500, increasing its value by 1,000 percent.
A new standard? QUALCOMM faces stiff competition from competitors that are trying to develop their own CDMA standard. Meanwhile, a rival technological standard has taken hold in Europe and much of the rest of the world, including the huge Chinese market. QUALCOMM officials charge that the European companies are deliberately seeking an incompatible CDMA technology to circumvent QUALCOMM’s patents and to give European companies an unfair advantage in the market. Ericsson and other European wireless companies say they are simply looking for the best technology and Visit Vault at www.vault.com for insider company profiles, expert advice, career message boards, expert resume reviews, the Vault Job Board and more.
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are not concerned with making their phones compatible with existing CDMA technology. In March 2000, QUALCOMM paid $1 billion in stock to acquire SnapTrack Inc., a leader in global positioning (GP) location technology. QUALCOMM now has control of nearly 50 patents owned by SnapTrack that will be critical to the deployment of GP systems. In the same month, QUALCOMM also acquired technology and systems consulting firm Within Technology, Inc., a company with expertise in collaborative workgroup software and other technologies. Terms of the agreement weren’t disclosed, but QUALCOMM, which worked with Within Technology previously on its Eudora e-mail software, reports that the deal will broaden its technical expertise considerably. Additional QUALCOMM moves have included alliances with NetZero, Sprint PCS, Samsung Telecommunications America Inc., In-Flight Network and Globalstar. The company has also expanded its presence in Europe by launching eQ-COM, which provides some of the continent’s transportations industries with wireless communications-based fleet management solutions. Further QUALCOMM deals have included a license agreement with Seiko and a $125 million bidding voucher received from the FCC.
Growth stunted Like many tech companies, QUALCOMM’s remarkable rate of growth in the late 1990s and early 2000s temporarily came to an end as the tech bubble burst. Thousands of employees lost their jobs in 2001 through 2003, when the company slashed employee head count from a high of about 10,5000 in 2001 to 7,400 in 2003. The company’s stock, which had skyrocketed, saw a steady decline in 2000 and continued to do so until late 2003, when wireless sales began to explode around the world. As part of the cost-cutting measures the company undertook in 2000, it sold its antennae infrastructure business to Ericsson and its handset manufacturing unit to Kyocera. It didn’t help matters much that the company made a bad move in November 2001, when QUALCOMM invested $266 million of equity financing in Vesper, a Brazilian CDMA wireless service provider, only to turn around in 2003 and sell the unit to Embratel Participacoes S. for an undisclosed amount after failing to turn the company around. Adding to the company’s woes, in July 2000, QUALCOMM announced plans to spin off QUALCOMM Spinco, its semiconductor and systems software business, filing for a $100 million IPO at the same time. To give Spinco access to necessary 116
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technology, QUALCOMM planned to assign some of its patents to Spinco. The move followed the spin-off of service provider Leap Wireless the year before. Spinco’s spin-off didn’t work out quite so well, however. In November, QUALCOMM announced that it was pushing back the proposed offering until January, and by mid-2001 the plans had been scrapped entirely.
Coming back Thanks to a solid strategy, however, in 2002 the company began to make a comeback – and in a hurry. For the fourth quarter 2002, QUALCOMM reported that revenue rose 34 percent to $874 million, while profits climbed to $190 million, versus a loss of $75 million in the last quarter of 2001. The rebound was made possible through a surge in demand for cell phones powered by CDMA technology and the company’s growing presence in China, Japan and South Korea.
Finally, talking cars Well, sort of. QUALCOMM teamed up with Ford Motor in a venture aimed at bringing everyday cars closer to Knight Rider’s KITT, in July 2000. Coined Wingcast, the joint venture concentrated on delivering wireless services to automobiles, including the full range of phone, Internet, entertainment, navigation and safety services. Things looked good for the joint venture until the company closed its doors in June 2002. There were a number of conflicting reasons given for the closure, include changing technology and new customer demands, but the real reason seems to be sluggish car sales at Ford. Ford had an 85 percent stake in the company, while QUALCOMM owned 15 percent of it. It was reported that QUALCOMM had invested about $25 million in exchange for the 15 percent stake in Wingcast, while Ford never publicly stated how much it had invested. In the fallout after Wingcast’s demise, QUALCOMM took about a $14 million loss and said that it was writing off another $11 million on its remaining investment in the third quarter of 2002.
Growth in the East QUALCOMM reported in early 2004 that it expects the booming Indian and Chinese telecom markets to continue powering the company’s growth as demand for wireless services expands in the world’s two most populous nations. There are currently more than a dozen Indian carriers adding a whopping 1.6 million wireless users each month. QUALCOMM is projecting that about 13 million CDMA phones will be sold Visit Vault at www.vault.com for insider company profiles, expert advice, career message boards, expert resume reviews, the Vault Job Board and more.
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in India and nearly 14 million in China during 2004 – a big chunk of the total estimated global sales of 142 million units. India has recently become a magnet for global telecom firms, as they scramble to get a piece of the country’s wireless market, which is forecast to hit 100 million by 2005. That’s a sharp increase from just 31.5 million users at the end of 2003. In order to meet this burgeoning demand, QUALCOMM is planning to establish a chip design and software development unit in India, which will be staffed by about 100 engineers. The company has also joined forces with Tata Teleservices Ltd, India’s second-largest provider of CDMA-based mobile services, to launch walkie-talkie mobile phone service in the country.
Play ball! While flush with boom-time money, in 1997 QUALCOMM cemented its legacy in the city of San Diego when it contributed funds to the expansion of the city’s major sports stadium in exchange for naming rights until 2017. QUALCOMM Stadium has played host to two Super Bowls, two World Series, Major League Soccer and Baseball All Star Games, the Holiday Bowl and concerts.
GETTING HIRED
Hiring process Normally, the company recruits through a variety of methods, including career fairs, campus recruiting, web advertising and employee referrals. To find out about current job opportunities, and search for open positions by division, location or job title, or check out the recruiting events the firm is scheduled to visit, consult the “Careers” section of QUALCOMM’s web site, www.qualcomm.com. Applicants can send a resume and cover letter indicating their position of interest to human resources.
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Qwest Communications International, Inc. 1801 California Street Denver, CO 80202 Phone: (800) 899-7780 Fax: (303) 992-1724 www.qwest.com
THE STATS
Denver, CO (HQ)
Employer Type: Public Company Stock Symbol: Q Stock Exchange: NYSE Chairman and CEO: Richard C. (Dick) Notebaert 2003 Employees: 47,000 2003 Revenue ($mil.): $14,288
DEPARTMENTS
KEY COMPETITORS
Accounting Management Marketing Sales
AT&T MCI Sprint
LOCATIONS
EMPLOYMENT CONTACT E-mail:
[email protected] www.qwest.com/careers/
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Vault Guide to the Top Telecom Employers Qwest Communications International, Inc.
THE SCOOP
Qwest for success Opening its doors in 1988, Denver-based Qwest Communications International Inc. quickly became a major player in the telecommunications market. It is currently one of the largest long-distance providers in the U.S. and has over 190,000 miles of fiberoptic cable worldwide. The company has ambitions to grow even bigger – Qwest has extended an offer to purchase another telecom giant, MCI. However, MCI has another suitor in the form of Verizon Communications, as of late February 2005, MCI’s board had not voted to accept Qwest’s offer.
Railroad ties Qwest’s roots can be traced to the railroad industry. The company’s founder, Philip Anschutz, began the Southern Pacific Telecommunications Company as a subsidiary to Southern Pacific Rail, with the intent of building fiber optic lines alongside the rail tracks. Anschutz eventually sold off the rail company, but retained ownership of the telecom business, which by that time had become a long-distance provider in the Southwest. In 1995, Southern Pacific Telecommunications acquired Qwest Communications and continued business under the acquired company’s name. In 1997, the same year that the company went public, Qwest made headlines by bringing former AT&T executive Joseph Nacchio on board as CEO.
Early acquisitions In March 1998, Qwest made a name for itself by acquiring LCI International Inc. for $4.4 billion. The combined companies created the fourth-largest long-distance company in the country. Later that month, Qwest acquired Amsterdam-based ISP EUnet to help position itself in the European Internet market. The company continued its expansion strategy in September of that year, purchasing Icon CMT for $185 million in stock.
U.S. West acquisition, layoffs Qwest took a page out of the 1980s corporate handbook in 1999, when the company acquired “Baby Bell” U.S. West in a hostile takeover. The $58 billion acquisition marked a major steppingstone for Qwest. Not only did U.S. West provide local 120
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service to about 25 million customers in 14 states, but the acquired company employed more than 61,000 workers and brought in over $12 billion a year in revenue. While the acquisition cemented the Qwest’s status as an industry leader, the company also had to take steps to correct U.S. West’s reputation as “U.S. Worst.” One action the company took was to announce layoffs of over 11,000 U.S. West employees, to be completed by the end of 2001. Qwest announced that the layoffs were part of a plan to “refocus” the local phone service provider as a provider of broadband, wireless, high speed Internet and bundled services.
Networking the world In November 1998, Qwest started a joint venture with Dutch company Royal KPN to build and operate a high-capacity, 9,100-mile fiber optic Internet Protocol-based network in Europe. The network connects Europe to North America, and allows users on both continents to share and use each other’s data, video and voice services. In March 2002, the company partnered with Japan Telecom to bring its services to multinational and regional businesses in Japan.
Mission to Mars Qwest applied its reach and technology to the emerging field of online education. Students in Oregon, Arizona and Washington were able to view actual images of Mars via Qwest computer technology in February and March 2002. The program, titled “Live From Mars 2002,” used a high-speed Internet connection to Qwest’s 190,000-mile network to allow the students to ask scientists questions and explore new images from the surface of Mars via videoconference.
Troubles in telecom In yet another episode of the accounting-practices debacle that for a time weakened U.S. stocks, Qwest became a target of the government’s scrutiny in March 2002 regarding the company’s 2000 and 2001 sales figures. The Securities and Exchange Commission (SEC) launched a criminal probe in July 2002. Richard Notebaert replaced Joseph Nacchio as CEO of Qwest a month prior to the investigation, with Oren Schaffer moving into the CFO slot less than a month thereafter. Through these two new officers, Qwest has been proactive in repairing the gaps in its records and its reputation. In late July 2002, the CEO publicly admitted to the company’s previous accounting errors and pledged to correct and restate financial data for the years and operations in question. Visit Vault at www.vault.com for insider company profiles, expert advice, career message boards, expert resume reviews, the Vault Job Board and more.
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The restated results from 2000 and 2001 weren’t released until October 2003, and showed that the company actually lost $1.5 billion in 2001 and $945 million in 2000, a far cry from the $19 billion and $19.7 billion in sales it had originally reported. The company also slashed revenue by $2.5 billion. On top of this, the company also cut about 7,000 jobs between 2001 and 2002.
Charges filed As a result of this accounting chicanery, four former execs at the company were brought to trial in 2003 for, among other things, conspiring to falsely recognize more than $33 million of revenue for the second quarter of 2001. The government contended that the four defendants wrote misleading letters and memos saying revenue from a deal to wire Arizona schools could be recognized in the second quarter of 2001, even though they knew the project would not be completed by the end of the quarter. (Some of the company’s former executives later reached settlements with the SEC in June 2004.) Also in March 2004, the Federal Communications Commission (FCC) proposed fining Qwest $9 million for failing to file 46 interconnection agreements with two states as required by law. The FCC said the company did not file with Arizona and Minnesota regulators agreements that set terms for rival carriers to access Qwest’s network as well as for carriers to send traffic over each other’s networks. As of April, no formal fine had been imposed.
Other probes But the restatement of its figures and the trial of its former executives was just part of the problems the company had to face. As of April 2004, Qwest had recorded a reserve of more than $100 million for the estimated liability associated with the probes by the SEC and the Department of Justice. In a filing with the SEC, Qwest warned that any losses related to resolving the probes could be more than it has in the reserves, saying that it is “probable that all but $100 million of the recorded reserves will be recoverable out of a portion of the insurance proceeds.” At the same time as its SEC filing, Qwest said it has future purchase commitments totaling about $4.4 billion. The deals will obligate the company to buy network services and capacity, as well as hardware or advertising from other vendors. On the downside, Qwest did not expect to report sales in the near term that are large enough to offset costs associated with some of these deals, but was working to renegotiate some of the commitments. 122
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Righting the ship Qwest took a major step in the right direction when the company reached a settlement agreement with the SEC in October 2004. Qwest agreed to pay the government $250 million, thus ending the agency’s investigation into incidents of fraudulent accounting at Qwest and enabling the company to focus its full attention on its business. The agreement was reached without any admission or denial of guilt on Qwest’s part.
Restructuring As a result of a change in its segments in December 2002, Qwest has organized its products and services in three segments: wireline services, wireless services and other services. In September 2003, the company sold off a fourth segment consisting of its directory publishing business, QwestDex, for $7.05 billion. In 2002, the company also reduced its debt through a series of transactions including a private debt exchange offer resulting in a gain of $1.9 billion. Qwest also renegotiated its credit and raised $1.75 billion in new funding. As of mid-2003, the company had managed to reduce its debt from over $26 billion to approximately $22 billion.
A mixed bag For the full year 2003, revenue at Qwest fell by 7 percent to hit $14.3 billion. For the fourth quarter, the company shed more phone lines and reported a loss of $307 million for the quarter, compared with a profit of $2.7 billion in the fourth quarter of 2002. During the quarter, Qwest lost customers in its wireless and consumer local phone segments, and total access lines in service dropped 4.7 percent to 16.21 million from 17.01 million in 2002. Local voice revenue sank another 11.2 percent to $1.67 billion, and wireless sales fell by 4.9 percent to the $137 million mark. On a muchneeded positive note, the company did post a 36 percent increase in long-distance customers, bringing its total to 2.3 million, while it gained 60,000 high-speed Internet accounts – giving the company a total of 637,000 DSL subscribers.
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GETTING HIRED
Hiring process Information regarding employment, locations, recruiting events and benefits at Qwest can be found on the company’s web site, at www.qwest.com/careers. The site’s job profile system will send job descriptions to registered users’ e-mail accounts based on their selected criteria.
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SBC Communications Inc. 175 E. Houston San Antonio, TX 78205-2233 Phone: (210) 821-4105 Fax: (210) 351-2071 www.sbc.com
LOCATIONS San Antonio, TX (HQ) Presence in Arkansas, California, Connecticut, Indiana, Illinois, Kansas, Michigan, Missouri, Nevada, Ohio, Oklahoma, Texas and Wisconsin
DEPARTMENTS Voice and data telecommunications products and services for consumers and businesses, including: Data Networks, Directory Publishing, DSL and Dial-up Internet access, Local, Long Distance, Managed Services, Satellite Television, VoIP, Wi-Fi, Wireless
THE STATS Stock Symbol: SBC Stock Exchange: NYSE Chairman and CEO: Edward E. Whitacre Jr. 2004 Employees: 168,950 2004 Revenue ($mil.): $40,787
KEY COMPETITORS AT&T Comcast Sprint Time Warner Verizon
EMPLOYMENT CONTACT www.sbc.com/gen/careers?pid=1
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Vault Guide to the Top Telecom Employers SBC Communications Inc.
THE SCOOP
An AT&T offspring Originally named Southwestern Bell, SBC Communications was one of the “Baby Bells” formed in 1983 following the AT&T break-up. Initially it was the smallest of the regional phone companies, providing local phone access in just five states. Less than two decades later, through a series of acquisitions, the Texas-based company has grown into a global telecommunications giant offering local, long-distance, wireless, data and Internet services, and as of early 2004 was second-largest telephone company in the U.S in terms of revenue. January 2005 marked a family reunion for SBC and its former parent. That month, SBC announced an agreement in which SBC will acquire AT&T. The transaction combines AT&T’s global systems capabilities, corporate and government business, and Internet protocol (IP)-based business with SBC’s local exchange, broadband and wireless solutions.
SBC grows up In 1997, the company merged with Pacific Telesis (another Baby Bell) in a $16.5 billion deal to become the second-largest local telephone company in the U.S. (behind Verizon). In 1999, SBC bought Ameritech (another Baby Bell) for $62 billion. Over the years, SBC has also absorbed SNET (Southern New England Telecommunications), Sterling Commerce and Prodigy. As of 2004, SBC had about 60 million phone lines in 13 states and held telecommunications investments in another 25 countries. It also owns a 60 percent stake in Cingular Wireless, making it the second largest wireless carrier in the United States, with 49 million wireless customers.
Going long SBC debuted its long-distance service in July 2000, when the FCC allowed SBC to offer the service in Texas. By 2001, SBC had won FCC clearance to offer longdistance service in all five of the original Southwestern Bell states (Texas, Kansas, Arkansas, Missouri and Oklahoma). SBC won approval for long-distance service in California and Nevada in 2002, and the rest of its 13-state region in 2003.
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Broad-banding out After the 1999 merger with Ameritech, SBC began Project Pronto, a $6 billion upgrade to its fiber-optic lines and related DSL connections. In 2001, SBC bought Prodigy Communications, an Internet service provider with 3.6 million subscribers nationwide and the largest number of high-speed DSL customers in the United States. In late 2002, SBC launched a co-branded service with Yahoo! Inc. providing broadband access for millions of customers throughout SBC’s service area. Through Project Pronto, SBC companies have made DSL service available to 39 million homes and small businesses, or 77 percent of its customer locations. In 2003, SBC announced an initiative to deploy more than 20,000 Wi-Fi (wireless, high-speed Internet access) hot spots in 6,000 venues throughout the nation by the end of 2006. SBC is also leveraging its relationship with Cingular Wireless to create an integrated Wi-Fi and third-generation (3G) wireless service that combines the strengths and benefits of Wi-Fi hot spots and wireless, high-speed data services. SBC most recently announced a plan – dubbed “Project Lightspeed” – to enable residential customers to access integrated digital TV, super-high-speed broadband access and voice over Internet Protocol (VoIP) services via a new fiber network.
The “dish” In July 2003, SBC partnered with EchoStar Communications Corp. to build a cobranded satellite service – the SBC DISH Network. The service, which was launched in March 2004, allowed SBC to become the first major telecom provider in the nation to offer TV, wireless, broadband and local/long-distance service, all combined in one monthly bill. The companies said that they also have plans to develop set-top boxes that combine the features of satellite TV, digital video recording, broadband, home networking and telecommunications services. Through the alliance, EchoStar has also been granted access to SBC’s sales and marketing team for selling the DISH Network service, which reaches about 8.5 million customers nationwide. As another part of the agreement, SBC will help fund the development of the co-branded bundled video services similar to its co-branding approach currently used for its SBC Yahoo! DSL Internet access service. In a separate transaction completed in March, SBC also has agreed to make a $500 million investment in EchoStar.
Top honors In February 2004, SBC was named “America’s Most Admired Telecommunications Company” by Fortune magazine. It’s an accolade to which it seems SBC has grown Visit Vault at www.vault.com for insider company profiles, expert advice, career message boards, expert resume reviews, the Vault Job Board and more.
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accustomed. It was the fifth time in a row and eighth time overall that the magazine has bestowed the honor on SBC. And in June 2003, for the fifth consecutive year, Fortune named the company one of the “Best Companies for Minorities.” SBC’s diversity has won accolades and awards from several other publications, including Hispanic and Hispanic Business, which rated SBC as a top employer for Hispanic employees. More than 10 percent of its employees, including 10 percent of the company’s board of directors, are Hispanic.
Diversifying the supply chain For 36 years, SBC Communications has worked with minority-, women- and disabled-veteran-owned businesses. In 2003, SBC Communications spent 15.4 percent of its total procurement, or $1.4 billion, with diverse vendors. The company notes that this figure is well above the average for corporate supplier diversity spending.
Corporate giving The SBC Foundation, the philanthropic arm of SBC Communications, supports efforts that enrich and strengthen diverse communities nationwide, particularly those with an emphasis on education and technology and those that benefit underserved populations. Since 1984, SBC Communications and the SBC Foundation have contributed more than $1 billion to nonprofit organizations across the country. In 2004, the SBC Foundation supported more than 1,000 organizations and programs, and awarded 47 percent of its direct giving grants to groups that serve diverse clients, including African-Americans, Native Americans, Asian Americans and Hispanics.
Weak economy fuels layoffs Like many corporations did during the economic downturn, SBC laid off employees in an effort to reduce costs. By March 2002, SBC had cut 7,500, or about 3.5 percent, of its 216,000 workers. In February 2003, SBC announced that it would outsource about 400 positions associated with its directory publishing business to Amdocs, an Israel-based outsourcing company in which SBC held a 10 percent stake. Just a few months later, SBC was able to engender a little good will among its employees, or at least those who work in Illinois. The company had laid off 600 workers in the state in December 2002, and had made plans to let go of about another
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500 employees when fate – or perhaps that should be, the state – intervened. State lawmakers passed legislation allowing SBC to increase the rates it charges competitors who want to use SBC’s phone lines to offer local service. Because of the anticipated increase in revenue, the company decided to hold off on the impending layoffs and pledged to not lay off any workers in the state for at least a year. SBC said none of the layoffs would affect customer service or areas responsible for long distance.
Tough quarter, but a good year The fourth quarter of 2003 was a tough one for SBC, as the company reported income of $905 million and revenue of $10.1 billion. Although these numbers look pretty good, they represent a whopping 61 percent decrease in quarterly income compared to the same quarter in 2002, when the company reported income of $2.4 billion on revenues of $11.2 billion. The losses came as SBC saw a 32 percent decrease in access lines between the third and fourth quarters, increases in pension and retiree benefit costs, and higher expenses associated with the company’s expansion into long distance and DSL. Despite losing some consumer access telephone lines, the company’s fourth quarter revenue still managed to benefit from growth in long-distance, DSL and business data services, according to the company. SBC added 2.9 million long-distance lines during the quarter, including 1.7 million lines in the Midwest, where the FCC approved SBC’s expansion in October. The company also added 377,000 DSL lines in the quarter, which stands as the company’s eighth consecutive quarter of growth in that area. In the company’s annual report, the company noted that one of its primary goals for 2004 was to double the number of customers who subscribe to local phone service, long distance, DSL or Cingular Wireless. While the fourth quarter numbers weren’t stellar, results for the full year look much better, as SBC saw income of $8.5 billion, up from income of $5.7 billion in 2002. Revenue slipped slightly, however, falling to $41 billion, down from $43 billion in 2002.
Work shutdown? A union representing about 100,000 workers at SBC gave the company a 30-day notice for a possible strike in April 2004. Although the two sides had been negotiating since February, they hadn’t been able to reach agreement on health and job security issues before the contracts between the Communications Workers of America (CWA) and SBC expired during the first week of April. After three months
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of negotiations, SBC negotiated a new five-year contract on May 25, 2004, covering the 100,000 CWA members at SBC. The agreement replaced the three-year contract that had expired the month before. As part of the labor negotiations, SBC and CWA agreed on an average base wage increase of 2.3 percent per year for the life of the contract; no monthly contributions would be required for healthcare costs; current CWA-represented employees would be guaranteed a job offer should their existing job be phased out. Also per the agreement, CWA-represented employees will be considered first for new jobs related to traditional telephone technologies; positions related to emerging technologies will be also be open to CWA-represented employees, but will be filled on a competitive basis. According to SBC, under the agreement, when combined with changes in the retiree benefits plan, the company will save an estimated $2 billion during the contract’s five-year period.
GETTING HIRED
Hiring process SBC’s recruitment web page, located at www.sbc.com/Career/Home.html, lists current job openings and encourages applicants to submit their resumes via regular mail. Applicants interested in specific, listed positions should include the “job numbers.” Most of SBC’s corporate staffing is filled through the San Antonio headquarters, even though positions may be located elsewhere.
Commitment to diversity SBC’s workforce diversity goal was established in accordance with the general customer base of the company’s 13-state territory, which, according to the 2000 U.S. Census, is 51 percent female and 36 percent people of color. The workforce at SBC closely reflects the customer base with an employee population that is 47 percent female and 38 percent people of color. In 2004, 50 percent of SBC Communications’ new hires were women; 51 percent were people of color. SBC has worked to increase leadership development opportunities for women and minorities through initiatives such as the company’s Leadership Development Program. This two-and-a-half-year program, designed for recent college graduates, targets high achievers and allows them to rotate among different assignments and
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locations throughout the company. Each assignment enables participants to develop a competency in a select position and make a measurable contribution. Nearly half of the program’s participants are female and nearly half are people of color. Leadership Development Program graduates have opportunities for accelerated development, early and frequent performance feedback, and upward movement. SBC says its philosophy is to provide employees with continuous opportunities to grow and develop their careers. SBC programs include: the SBC Center for Learning, a virtual campus where employees can access career-enhancing courses and find opportunities for professional and personal growth; Career Path, a webbased system that provides employees with the tools to manage their SBC careers; and the SBC Management Tuition Reimbursement Policy and the Non-Management Tuition Aid Policy, which provide financial assistance to employees who are working to attain academic degrees that are beneficial for both the employee and the company. SBC also supports employee-initiated organizations that support diverse employee needs and are open to all SBC employees. They include: ACCA (Asians for Corporate and Community Action); Community NETwork (The African-American Telecommunications Professionals of SBC); FACES (the Filipino-American Communications Employees of SBC); HACEMOS (The Hispanic Association of Communications Employees of SBC); OASIS (The Organization of Asian Indians at SBC); PWSBC (The Professional Women of SBC); and SPECTRUM (The Association of Lesbian, Gay, Bisexual and Transgender Employees of SBC).
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Sprint Corporation 6200 Sprint Parkway Overland Park, KS 66251 Phone: (800) 829-0965 www.sprint.com
LOCATION Overland Park, KS (HQ)
THE STATS Employer Type: Public Company Stock Symbol: FON Stock Exchange: NYSE Chairman and CEO: Gary D. Forsee 2003 Employees: 67,000 2004 Revenue ($mil.): $27,400
KEY COMPETITORS AT&T MCI Verizon
EMPLOYMENT CONTACT www.sprint.com/hr/career_fields.html
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THE SCOOP
A communications leader Sprint offers a wide range of communication services, including global IP, wireless, local phone service and multi-product bundles. A Fortune 100 company with more than $26 billion in revenue in 2003, Sprint has engineered, developed and deployed technologies that include the U.S.’s first nationwide, all-digital, fiber-optic network; an award-winning Tier-1 Internet backbone and the largest all-digital, nationwide PCS wireless network in the country. The company’s wireless business, Spring PCS, is one of the top wireless providers in North America. The two businesses had traded separately for several years, but were merged back into one company in April 2004, when Sprint reorganized and divided the company into business and consumer units.
Over 100 years of history (and several names) Sprint began in 1899 as the Brown Telephone Company, a local carrier based in Abilene, Kansas. The company, founded by Cleyson L. Brown, was one of the first alternatives to the dominant Bell Telephone system. After the Depression, the Brown company reorganized as United Utilities, and by the 1950s, had grown into the second-largest non-Bell phone company. After another name change in 1972, the company became known as United Telecommunications. In 1986, United Telecom entered the deregulated long-distance market with the launch (under the Sprint name) of the first all-digital, fiber-optic network (traditional phone lines utilize copper wires and analog technology). Later that year Sprint handled the country’s first coast-tocoast fiber-optic transmission: a videoconference linking New York and Los Angeles. United Telecom officially changed its name to Sprint in 1992 to capitalize on the long-distance unit’s strong brand recognition.
The jump to wireless In 1998, Sprint created a separate tracking stock, PCS, for its wireless operations. Between 1999 and 2001, Sprint led the wireless industry in terms of customer growth. By the end of 2001, the wireless division had 15.8 million customers (including more than two million affiliates) and total revenue for the unit rose 53 percent to $9.73 billion that year. In late 2002, the company introduced its thirdgeneration wireless service, enabling the company to deliver data services at much faster speeds. Sprint’s two stocks, FON and PCS, traded separately for several years, but were recombined into one stock (FON) in April 2004 as Sprint moved from a Visit Vault at www.vault.com for insider company profiles, expert advice, career message boards, expert resume reviews, the Vault Job Board and more.
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product-centered organization to a more customer-focused model with enterpriseand consumer-directed business units. Sprint continues to be one of the top wireless providers in North America with more than 23 million total subscribers announced at the end of the third quarter of 2004.
A mega-merger that wasn’t In 1999 MCI WorldCom negotiated a takeover of Sprint worth about $120 billion – the largest proposed merger to date. U.S. regulators, however, worried the proposed deal would stifle competition in the long-distance and Internet-backbone markets. In June 2000, the DOJ moved to block the merger on antitrust grounds, and the following month Sprint and WorldCom formally called off their plans to merge.
Feeling the heat from the telecom meltdown The soft economy, excess network capacity and price wars hit the telecommunications industry hard in 2001. The weak conditions led Sprint to lay off some 11,000 employees, including 6,000 people who lost their jobs when the highspeed network service ION was scrapped, and 3,000 customer service representatives in the Sprint PCS unit. Albeit on a smaller scale, the company continued to reduce its workforce in 2002. The headcount came in at 72,000 at the end of 2002, a drop off of almost 12,000 employees since 2000.
Executive shake up To the surprise of many Sprint employees, reports surfaced in early 2003 that chairman William Esrey was planning to leave the company. The reports were quickly followed by the news that COO Ronald LeMay would also be departing and that top BellSouth executive Gary Forsee would take over the reins as CEO. In a move of swift defiance, BellSouth obtained a restraining order forbidding Forsee to take the job. In a press release Sprint claimed that Esrey and LeMay would remain with the company while it “evaluated alternatives.” After a court ruling in its favor, Sprint presented Forsee with the chief executive title. LeMay resigned from the COO post and Esrey’s duties were handled by Forsee.
Slimming into shape Continuing to cut costs, Sprint kept trimming its employee numbers throughout 2003. As of the summer of 2004, the company employs about 65,000 people, which means its employment rolls have declined by almost 20,000 in the past four years. Some of 134
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the decrease in employees can be attributed to its reorganization: Sprint has also slimmed down its business areas with the sale of Sprint Publishing & Advertising to R.H. Donnelley and parted with its managed hosting operations. Additionally, Sprint announced in February 2004 that it is outsourcing its customer service operations to IBM. Sprint hopes that the deal will save the company more than $500 million over the next three years. The company’s 2004 second quarter results indicated that Sprint’s aggressive restructuring and reduction moves are paying off. Net operating revenue was up 6 percent and both its new segments, business and consumer, reported sequential growth. Sprint attributes the improvement to its wireless business and, to a lesser degree, local phone services. The next quarter didn’t go quite as smoothly, though. Sprint announced in October 2004 that it was taking a $3.5 billion charge to write off part of its long-distance business. The charge resulted in the company reporting a third quarter loss of $1.9 billion. Interestingly enough, competitor MCI had announced that it would also take a $3.5 billion charge against earnings the day before Sprint’s announcement.
Expanding through new deals Looking for new ways to grow in a highly saturated telecom market, Sprint is making deals to let other companies lease its wireless network and then market their own products. Virgin Mobile has bought wholesale service from the company and Qwest resells Sprint service. Longstanding foe AT&T will begin to use Sprint’s wireless network sometime in 2005 now that Cingular has closed its deal to buy AT&T Wireless. The service provider announced another major deal with sports network ESPN, which will begin offering its own ESPN-branded cell phone service using Sprint’s network. The service, which is likely to offer sports fans features such as updates on game scores, is set to debut in 2005, probably in the latter part of the year. Teaming up has proved successful as it brought in 300,000 subscribers in the second quarter of 2004, nearly two-thirds of its total additions. In December 2004, Sprint and Nextel Communications tentatively agreed on key terms in a $35 billion merger that would create a shared network of 39 million subscribers, the third-largest cell phone operator behind Cingular Wireless and Verizon Wireless. Under the plan, Sprint CEO Forsee would be the new CEO of the combined company, with Nextel’s CEO Timothy Donahue as the executive chairman. Corporate headquarters would be moved to Reston, Va., where Nextel is based, with operating headquarters in Overland Park, Kansas, where Sprint is based. Sprint shareholders would possess 51 percent of the combined company, which plans to Visit Vault at www.vault.com for insider company profiles, expert advice, career message boards, expert resume reviews, the Vault Job Board and more.
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spin off Sprint’s local telephone business. (Sprint provides local services to 39 states and the District of Columbia.) Sprint is also surfing the pipes of cable companies, including Time Warner and Mediacom, by offering phone services in conjunction with products sold by the cable giants. Not only that, the company is looking into offering TV programming to its wireless customers. According to a November 2004 report in The Los Angeles Times, Sprint has been talking to QUALCOMM about using some of its broadcasting spectrum to offer the service. Don’t expect to be watching your favorite shows on your phone in the very near future, though; Qualcomm doesn’t expect to have its network completed until sometime in 2006.
GETTING HIRED
Recruiting 101 Sprint recruits extensively at college campuses and business schools for its business and technical units. A schedule is posted on Sprint’s detailed employment web pages (see www.sprint.com/hr/college_recruiting.html). The company employs several recruiting and training programs for students in the areas of finance, technology and engineering, and customer care. Sprint recruits at regional schools, as well as some of the country’s top business schools. Former MBA interns report going through one round of two back-to-back interviews on their school campuses. The company also has a recruiting program for military personnel, including veterans, spouses and other family members of veterans/active military personnel, reservists and soldiers about to leave active duty. Sprint is one of 7 percent of U.S. employers that offer employees both a pension and a 401(k) plan.
Inside the interview Company insiders generally report undergoing a screening interview and then touring the facility for a round of three or four interviews with managers and potential colleagues. Even engineers and other people in technical positions report that their departments do not ask technical questions or brainteasers during their interview process. Sprint recruits for the “whole person,” says one engineer. “It is not sufficient to be the smartest person in the world if you don’t have the social skills to
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be effective.” The web site also has a job search function and allows prospective employees to submit their resumes.
Diversity efforts pay off In April 2004, Sprint ranked 11th overall in DiversityInc.'s list of Top 50 Companies for Diversity and was named as one of the top 100 businesses for college hires by The Black Collegian magazine. Sprint recruits and places top minority students in internships through partnering with INROADS, the Hispanic College Fund and the United Negro College Fund. In 2003, the company established a diversity council that is headed by Chairman and CEO Gary Forsee and supports several affinity groups for employees of various ethnicities.
OUR SURVEY SAYS
Unconnected when it comes to culture “The company’s culture is very open, with less formal hierarchy than I expected in a company with more than 50,000 employees,” one former summer associate reports. Sprint is “pretty laid-back, generally,” says one employee. “The atmosphere is hard working but relaxed – in other words, not strenuous or stressful,” says another. One staff associate describes the “young company” culture as “loose.” However, one summer associate who turned down an offer to return reports that “overall, when you’re dealing with Sprint, you’re dealing with a large corporation.” “Like all large companies, it does have its frustrations – see Dilbert,” says another insider.
Find your own center Employees say that Sprint management is markedly decentralized, even within Sprint’s Kansas HQ, meaning that different departments may have disparate environments. “The group where I most recently had responsibilities was a very unstructured, self-motivated environment,” says one long-time Sprint employee, “whereas others are more rigid and structured.” According to another insider, “there are cultural tensions between the mature and more entrepreneurial groups within the company.” “The company is very decentralized when it comes to implementation of policies – they are left up to local management,” another employee says. “Corporate culture? Well, it varies from location to location. Sprint’s a big place and there’s more than one ‘culture,'" sums up another employee. “It depends on where you’re Visit Vault at www.vault.com for insider company profiles, expert advice, career message boards, expert resume reviews, the Vault Job Board and more.
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working, what you’re doing and who you’re working for. Here in the Kansas City area, there are at least 60 separate places to work.”
In general, casual dress As with company culture, the dress code at Sprint varies from location to location. One insider remarks that the dress code “is very much dictated by the regional culture: Atlanta is extremely formal, whereas Philly is only formal on demand, but New York City is formal again.” However, most employees report that Sprint leans toward the casual side. “Generally, the accepted dress is ‘corporate casual,' unless you are involved in direct customer contact, in which case traditional business attire is more common.” “If you work in some of the corporate buildings, you may need to wear dressier clothes,” says another. However, “most of the organizations are becoming informal,” reports one staff associate.
Flexible career path “Sprint is very flexible in working with you to determine the best career path for you. It is not uncommon for employees to change jobs after a year or two and pursue further experience, possibly in another part of the U.S., if they so desire,” according to one associate. “Most managers interviewing will even try to help point you in the right direction if they feel you may be more comfortable in a different job,” says one insider.
A wealth of perks Among Sprint’s extras is what one employee calls “phenomenal health goodies.” “They pay a large portion of your insurance and that can mean extra money in your pocket. If you price how much you pay as compared to any other company, you will see very fast how much Sprint pays,” says another employee. “Also there are many different options, depending on what your preferences are, on how much you can afford and how much flexibility you need concerning where you have your doctor or hospital.” “I am paying around $6 a week for insurance – both medical and dental – for myself, my wife and our eight-month-old baby,” reports one worker. One veteran employee remarks on the company’s flextime policy: “I get 200 [hours] per year to use whenever and however I wish, [with] few regulations.” Amount of flextime is based on “length of service.” Another of the perks Sprint employees rave about is the company’s tuition reimbursement program. “The tuition you pay for college or graduate credits can always be reimbursed, so its up to each individual if they want
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to continue their education,” reports one systems analyst. Vacation at Sprint is nothing to write home about: two weeks to start, and three weeks after five years. Sprint maintains a relocation program through which it sometimes buys the homes of employees who are moving.
Top of the line “The company is in Middle America, and the lifestyle is kinder and gentler than in Manhattan, but my peers were as smart and savvy as anywhere else,” says one former summer associate. However, adds one long-time employee, there are “hardly any women or minorities at the executive level.” Sprint employees heap praise on their co-workers. “One of the things that always impresses me is the quality of the people who work here,” says one engineer. A staff associate concurs: “I think it’s pretty competitive. They only recruit from the top schools.” “Sprint is very selective – you should have general management aspirations,” says yet another insider in the staff associate program. “We are also looking for more experience. An associate’s experience prior to business school is usually more than four years.” “I would have to say the best part is the people I work with,” says one insider.
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Verizon Communications 1095 Avenue of the Americas New York, NY 10036 Phone: (212) 395-2121 Fax: (212) 869-3265 www.verizon.com
THE STATS
New York, NY (HQ)
Employer Type: Public Company Stock Symbol: VZ Stock Exchange: NYSE Chairman and CEO: Ivan G. Seidenberg 2003 Employees: 203,100 2003 Revenue ($mil.): $67.8
DEPARTMENTS
KEY COMPETITORS
Accounting Engineering Management Marketing Sales
AT&T MCI Sprint
LOCATION
EMPLOYMENT CONTACT www22.verizon.com/about/careers/
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THE SCOOP
The leading local and wireless provider Verizon was created in 2000 when Bell Atlantic merged with GTE. The company is the largest local phone service provider in the U.S. with control of one-third of all local phone lines. Verizon Wireless (Verizon’s joint venture with Vodafone) is one of the leading wireless provider in the nation with more than 42.1 million customers. Verizon also provides long-distance and Internet services, is the world’s largest provider of print and online directory information, and employs about 208,000 people across the globe. The company currently has 143.2 million access line equivalents and 42.1 million wireless customers. Its global presence encompasses investments in the Americas and Europe through four segments: domestic telecom; domestic wireless; international, which includes international wireline; and wireless communications and information services, which is engaged in print and online directory publishing and is a content provider for electronic communications products and services.
Business segments The company’s domestic telecom operation services 143.2 million access line equivalents in 29 states, the District of Columbia and Puerto Rico. The domestic segment also provides long-distance and other telecommunication services. The domestic wireless segment is charged with providing wireless voice and data services, paging services and equipment sales in the United States, principally through Verizon Wireless. The company’s international business includes international wireline and wireless communications operations and is responsible for investments primarily in the Americas and Europe. Finally, Verizon’s information services segment provides print and online directory publishing and is a content provider for electronic communications products and services. This unit makes the Verizon SuperPages print yellow and white pages directories, as well as an online directory, SuperPages.com. Combined, these segments produced revenue of $67.8 billion in 2003, a 0.7 percent increase from 2002.
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Bell Atlantic: joining the big leagues An original Baby Bell, Bell Atlantic was spun off from AT&T in 1984. The company started out providing telephone service in six states and the District of Columbia and soon expanded into new services such as cellular, paging, Internet access and directory publishing. In 1997 it acquired fellow Baby Bell NYNEX, expanding its local and wireless services to 13 states and the District of Columbia. Bell Atlantic made a huge splash in the cellular phone market in 2000 when it combined its domestic wireless operations with Vodafone AirTouch to create Verizon Wireless. Verizon owns 56 percent of the venture, while Vodafone owns the remaining portion.
GTE’s evolution Founded in 1926 and bankrupted by the Great Depression, GTE emerged in 1935 as General Telephone and grew into the largest local telephone service provider not affiliated with the Bell System. Several decades later GTE emerged as the largest local phone operator in the country when it merged with Contel in 1991. The acquisition also made GTE the second-largest cellular operator in the U.S. at the time. The company expanded into the Internet arena in 1997 with the purchases of BBN Corp. and Genuity. The same year it invested $465 million in long-distance carrier Qwest.
Baby Bell and GTE tie the knot GTE merged with Bell Atlantic in June 2000 to form Verizon Communications. With the addition of GTE’s wireless assets, Verizon Wireless became the largest wireless communications provider in the U.S. The company had planned to spin off Verizon Wireless in an IPO shortly after the merger, but delayed the action because of the slow IPO market. The company then rescheduled the $5 billion IPO for mid-2002, but again viewing the market as lackluster, started dragging its feet. Finally, in January 2003, Verizon scrapped the idea of an IPO altogether.
Lending its services Verizon came to the communications rescue following the terrorist attacks on September 11, 2001. While people struggled to get in touch with loved ones, Verizon aided in the cause, even though its downtown office had been nearly destroyed by the collapse of the Twin Towers. The company offered free local service from all of its payphones in the five New York boroughs for several days following the attack. It
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Vault Guide to the Top Telecom Employers Verizon Communications
also installed hundreds of new phone lines in hospitals, police stations and temporary work centers.
Tough climate Like most telecommunications companies, Verizon’s business suffered during the economic slowdown that began in 2001. The weak economy hurt sales throughout 2002. In response, Verizon eliminated about 18,000 positions in 2002 to help save costs. That’s in addition to the 29,000 job cuts that had been made in 2001. But the company didn’t fare much better in 2003 on the labor front. In July, the 60,000 employees of Verizon who are represented by the Communications Workers of America (CWA) voted to give their union leaders authorization to call for a strike. In the vote, 92 percent of the workers supported a walkout if a contract was not approved by midnight on August 2nd. But a funny thing happened on the way to a strike. As the company flew in managers to New York City and had some 30,000 potential replacement workers waiting in the wings, the midnight deadline came and went without a deal, but the union didn’t strike. The company’s managers had good reason to expect a walkout. It had endured an 18-day walkout in 2000 and worked its way through a 17-week-long strike in 1989. The company’s profitability gave the union its strongest argument to press for a new contract – Verizon took in $67.6 billion in revenue in 2002, the highest in the industry. Profits were $4.1 billion. The threat of a strike didn’t last long, however, as in September, the two sides came to an agreement, which includes wage increases of 3 percent every year for five years, a $1,000 annual cash bonus for some technicians and a provision that will protect employees with more seniority from layoffs – a key issue that the union said had been stalling an agreement. The contract also included job security and health benefits wins for the union.
Selling out? In February 2004, word leaked that an acquisition of Verizon Communications could be on Vodafone’s agenda, as it seeks to gain sole control of Verizon Wireless, its joint venture with Verizon. It was rumored that Vodafone could pay up to $150 billion for Verizon and its wireless business, in which Vodafone already holds a 45 percent stake. The deal quickly unraveled, however. Earlier in 2004, Vodafone made a serious attempt to buy AT&T Wireless Services for $38 billion, a move that would have compelled it to pull out of the joint venture with
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Vault Guide to the Top Telecom Employers Verizon Communications
Verizon. Having lost its bid for AT&T to Cingular Wireless, (which paid $41 billion), Vodafone now says it is happy to remain in business with Verizon, although many investors see some tough negotiations between the two companies when their contract is up in 2005.
GETTING HIRED
Hiring overview For information about the company and to search for open positions, visit the Verizon web site at www22.verizon.com/about/careers. Interested candidates can also set up a resume online and apply directly for any open position. The company also posts a complete list of recruiting events across the country, at www22.verizon.com/about/careers/calendar.html. Verizon’s web site also offers information about the company’s internship program, known as the Verizon College Intern/Co-Op Program. The program offers undergraduate and graduate business and technical majors the opportunity to gain experience in the telecommunications industry. The internships are structured assignments in Verizon’s various business and staff units. The company’s internships generally include formal performance appraisals, orientation, professional skills workshops, company/technology information sessions, online training opportunities, social events and networking opportunities. Students can apply online for these internship programs.
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Alphabetical Listing of Employers ALLTEL Corporation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10 AT&T . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15 BellSouth Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22 Charter Communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27 Cingular Wireless . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33 Cisco Systems, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37 Comcast Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45 Corning Incorporated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .50 Cox Communications, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .56 The DIRECTV Group, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .61 EchoStar Communications Corporation . . . . . . . . . . . . . . . . . . . . . . . .67 Lucent Technologies Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .73 MCI, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .81 Motorola, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .88 Nextel Communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .95 Nokia Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .100 Nortel Networks Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .107 QUALCOMM Incorporated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .114 Qwest Communications International Inc. . . . . . . . . . . . . . . . . . . . . .119 SBC Communications Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .125 Sprint Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .132 Verizon Communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .140
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