RHK: No Numbers for You!

RHK looks to go upscale by ceasing public distribution of basic market research data

March 21, 2003

3 Min Read
RHK: No Numbers for You!

As the telecom industry slows down and scales back, so have market research firms. Case in point: RHK Inc. is a smaller company than it used to be, and lately it seems to be repositioning itself as a high-end advisory firm, a move away from its past as a high-profile market research house.

While RHK hasn't publicly recast itself, there are several clues that it wants to change the way it has been perceived in the past few years. This week, press releases have disappeared from its Website, and it recently told a Light Reading reporter that certain members of the media would have to pay to get its market-share statistics.

"Our market share information is released to clients," writes spokeswoman Jeneane Crawford, in an email to Light Reading. "You're welcome to purchase the report that contains that analysis... I can put you in touch with our client services department." Crawford makes it clear that RHK isn't requiring payment from all media. But the company has cut back on staff and can no longer field most media inquiries, she says. "We will still give numbers and information to the kinds of outlets that serve our clients... such as The Wall Street Journal. It's more a matter of resources than a change in positioning."

One thing is clear: RHK is trying to downplay its past as a hype-heavy firm whose numbers helped fuel the expectations of the telecom bubble. Granted, RHK didn't just make up its forecasts, but the telecom economy's wild swings in the late 90s and early aughts certainly bit the firm in the backside more than once (see RHK's Fat OSS).

In October 2000, for instance, RHK forecast that the North American optical transport market "will see a spending increase... to $29 billion in 2001." (See Report: Carrier Spending to Hit $370B.) Eleven months later, RHK revised its numbers, saying, "the North American optical transport market... is expected to end the year at $12.5 billion, down from $19.6 billion for 2000." (See RHK Revises Forecast.) So in less than one year, RHK ratcheted the forecast down by well more than half -- a shock for anyone who was planning their business on the predicted swell of optical transport gear sales.

RHK hasn't changed the kinds of services if offers, but it does talk up some ahead of others. "We are a research and advisory services firm, not a market research company," writes Crawford. Interestingly, the company's old positioning, as found on its press releases for several years, crowned RHK "the leading industry market research and consulting firm specializing in the analysis of advanced technologies for the public telecommunications network." [emphasis added]

RHK was founded in 1991. By September 2001, as more and more people came to rely on RHK as a guiding light in the telecom market, the company swelled to more than 130 people -- a growth of 160 percent from its January 2000 headcount of about 50. A Dun & Bradstreet report of November 2002 estimated the firm's annual sales at $9.2 million.

Shortly after it peaked, RHK began to shrink. The firm's clients and others acknowledge that RHK has endured several rounds of layoffs during the past two years. In July 2000, when RHK announced it had received its first outside venture funding, the company said it was growing at "over 100% per year" and it boasted a staff "70-plus," with more than 50 percent of those workers being analysts. A current count of the company's analyst roster shows 33 analysts, a hint that the company's headcount is back in the seventies again -- or lower.

Crawford declined to say how many people RHK employs, what its revenues are, or how much venture funding it has raised to date.

— Phil Harvey, Senior Editor, Light Reading

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