Alcatel, Germany Shun Telecom 2003

Big turnaround coming in 2003? Some of the major players aren't banking on it. In fact, withdrawals of some of the biggest names from the giant Telecom 2003 show hints that the fear factor is rising -- not abating.

The ITU Telecom World 2003 event, sponsored by the International Telecommunication Union (ITU) every four years in Geneva, Switzerland, is considered the most important international telecom gathering anywhere. Ever. Traditionally, vendors have marked the event by spending vast sums on outrageously lavish booths -- some of which include multiple floors, escalators, and open bars.

But it's become apparent that when its doors open on October 12, some major telecom players will be missing. Alcatel SA (NYSE: ALA; Paris: CGEP:PA) quietly announced July 30 that it plans to pass on the big show as "a consequence of the current market conditions and to be fully in line with its cost cutting program."

Other no-shows include Fujitsu Network Communications Inc. (FNC), although it's not clear whether its parent company will be there.

Some previous exhibitors haven't said no -- yet. Marconi plc (Nasdaq/London: MONI), for instance, says tradeshows are a low priority these days. "We're spending lots of time with strategic customers, where, frankly, most of our revenues are coming from," says spokesman Jim Blew. He says this approach will prevail until the market picks up. It entails focusing on small meetings and key speaking engagements instead of big, flashy booths to attract newcomers.

The ITU isn't pleased with any of this. And it's dreading the chance of other defections, most notably by another European heavyweight, Siemens AG (NYSE: SI; Frankfurt: SIE).

Although a spokesman for Siemens told Light Reading today that the vendor will be at the show, it hasn't notified the show's management -- and they've noticed: "We haven't yet heard a yes or no," says ITU PR officer Piers Letcher. By this time prior to the Telecom '99 show four years ago, show management had heard.

Service providers also seem on the outs, particularly the Western European PTTs, which have enjoyed a sizeable presence at the World Telecom show in the past. After Europe's deregulation commenced, circa 1997, many of these providers were eager to spend big bucks on show exhibits in order to attract CLECs (competitive local exchange carriers) as partners or even acquisitors. Now the CLECs are gone or otherwise spoken for, and the PTTs are facing their own economic woes (see Debt Weighs on Euro Carriers).

British Telecom (BT) (NYSE: BTY), Deutsche Telekom AG (NYSE: DT), and France Telecom SA have not yet signed up, although the ITU still hopes to see BT and France Telecom in the pavilions dedicated to showcasing their respective countries.

Germany, though, has opted not to have such a pavilion this time around, which likely cements the absence of Deutsche Telekom. "The Germans feel they have another large telecom show, CeBit, and don't need to do Geneva as well," laments Letcher.

More expectedly, smaller players seem to be dropping out. Despite being listed as an exhibitor on the show's Website, Calient Networks Inc. hasn't yet decided to go. Ceyba Inc. did not return calls and email requesting confirmation.

On the plus side, Cisco Systems Inc. (Nasdaq: CSCO), Lucent Technologies Inc. (NYSE: LU), and Nortel Networks Corp. (NYSE/Toronto: NT) have made plans for the show, although it's not yet clear what level of resources have been committed. And at least one smaller player, Laurel Networks Inc., says its plans to be there are firm.

The ITU claims there's still plenty of time for folks to sign up and that, overall, it's gotten the same level of interest in Telecom 2003 as it garnered in August 1998 for the then-upcoming Telecom '99 show. Furthermore, it expected a drop in exhibit subscriptions, in part due to the macroeconomic situation and in part thanks to some changes the ITU has made.

Show management has cut by two thirds the maximum size of the booth or stand each vendor can have -- in response, it says, to pleas from big exhibitors who were concerned about leveling the playing field at a show associated with the august ITU. Last time, a booth could swell up to 1,500 square meters. At Telecom 2003, it will be limited to 500 square meters. That, plus the downturn, will probably reduce the exhibit's overall take from floor space. "We expect to have 70 or 80 percent of last time's total," Letcher says.

Costs per square meter are 700 Swiss francs (about US$470), according to the show Website -- rates comparable with those of Telecom '99, for which 100,400 square meters of show space ultimately were sold.

Not that the ITU is in this to make money the way a conventional show management would. According to Letcher, the not-for-profit ITU aims mainly to square its own fees. It uses any profits over breakeven to fund telecom projects in underdeveloped member countries -- projects such as distance learning and tele-medicine, as well as run-of-the-mill telecom infrastructure buildouts.

Its global telecom emphasis is one reason the ITU will likely run after exhibitors like Alcatel that have opted out. "We're always disappointed when a major participant pulls out," Letcher says of Alcatel's departure. "Their absence is harmful to the 189 member countries," he maintains, which expect the exhibit to contain a representation of key worldwide suppliers. The ITU will continue to petition Alcatel to change its mind, he says.

Is that likely to happen? "No, the decision as of now is not to participate," says an Alcatel spokesperson.

— Mary Jander, Senior Editor, Light Reading
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Vesting 12/4/2012 | 9:57:41 PM
re: Alcatel, Germany Shun Telecom 2003 I think this was a wonderful decision. Trade shows have become a ridiculous waste of valuable resources. After going to Atlanta for four years in a row, I am ready to sit out Supercomm next year myself. Too bad too many vendors are afraid to shun these money pits. I question LR's statement that Cisco and Nortel attending are on the "Plus Side". Mark one on the plus side for Alcatel in my book.
Nomoredemo 12/4/2012 | 9:57:37 PM
re: Alcatel, Germany Shun Telecom 2003 If the big guys dont show up that will give a chance to start up to rise and shine.
sigint 12/4/2012 | 9:57:36 PM
re: Alcatel, Germany Shun Telecom 2003 If the big guys dont show up that will give a chance to start up to rise and shine.

And, the chance to lay off another 50 people to cover the costs ...
lightfantastic 12/4/2012 | 9:57:33 PM
re: Alcatel, Germany Shun Telecom 2003 In the last few years, we have seen trade shows wither and die (Supernet), or hang on via life support (N+I), but I am not convinced that our industry doesn't need them.

I am a true believer in the benefits of an annual SUPERCOMM. The networking, the exposure, the customer meetings - despite the downbeat tone of SUPERCOMM this year, all these elements were still there.

And I believe the ITU show will be the same. For those who remember Telecom 99 - of course, nothing will ever be like that again. But Telecom 2003 should be a defining time in our industry, and if you can make it to the show, I wouldn't miss it.

As for Alcatel bowing out, I am surprised, and a little irritated. They raised the bar in 99 for excessive trade show spending, and now they are AWOL. If this is the trend (large companies backing down) - GREAT. Telecom 2003 should be less about the glitz and more about the technology and the future - because that's what we need to know.


davey59 12/4/2012 | 9:57:30 PM
re: Alcatel, Germany Shun Telecom 2003 Over the years, trade shows wax and wane as the cycles of the moon, some shows are the hottest ticket in town then fall out of favor to be replaced with an new show in town. The trick is in knowing which shows will be the most profitable use of your resources. If you book space and sit there at your booth and wait for the hordes to flock to your booth, then you will be not using the show as effectively as you could. Trade shows are still a great way to see customers (book meetings before you go to the show), network with peers, get impressions of your competitors/customers and how well they are doing, catch up with industry gossip, etc
willywilson 12/4/2012 | 9:57:29 PM
re: Alcatel, Germany Shun Telecom 2003 Turn out the lights
The party's over
They say that all good things must end
Call it a night
The party's over
And tomorrow starts the same old thing again

- Willie Nelson
geof hollingsworth 12/4/2012 | 9:57:27 PM
re: Alcatel, Germany Shun Telecom 2003 Don't the villains ever sleep?

Tech leaders urge lawmakers to tackle reform slowly

At a Monday gathering of Silicon Valley tech executives and Democratic members of Congress, much of the buzz was about how to emerge from the wave of business scandals with as little new regulation as possible.

willywilson 12/4/2012 | 9:57:16 PM
re: Alcatel, Germany Shun Telecom 2003 The arrogance of Silicon Valley will survive undiminished now that it's become crystal clear that no serious steps are going to be taken to punish the fraud that's occurred or prevent the same thing from happening again.
broadbandboy 12/4/2012 | 9:57:16 PM
re: Alcatel, Germany Shun Telecom 2003 Those of you who compare Telecom to a puny little gathering like Supercomm have no idea what you are talking about.

There is no comparison. I can't explain the differences, you have to go there and experience it yourself. Even CeBit is no match.

The overwhelming scale of Telecom'99 demonstrated the power and importance of the global telecomunications industry at its peak. The overspending on exhibits (multiple floors, elevators, restaurants, Orient Express trains, TV studios, lavish parties etc.) was ironically analagous to the ruinous overspending on communications infrastructure that occured throughout the world.

As goes Telecom Geneva, so goes the telecom industry, n'est pas?

netskeptic 12/4/2012 | 9:57:14 PM
re: Alcatel, Germany Shun Telecom 2003 > The arrogance of Silicon Valley will survive
> undiminished now that it's become crystal clear
> that no serious steps are going to be taken to
> punish the fraud that's occurred or prevent the
> same thing from happening again.

Willy, we are talking about meeting between Silicon Valley executives and Democrats and you can be mistaken for a Conservative Republican again. It is time do your ritual swearing of being a true Democrat.


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