Computer-Mediated Communication Magazine / Volume 1, Number 1 / May 1, 1994 / Page 2

Ray Smith Explains Bell Atlantic

by John December

WASHINGTON, DC (April 7) In a speech before the National Net '94 conference in Washington, Bell Atlantic CEO Raymond Smith gave some lessons for flourishing in telecommunications. Alluding to the called-off merger of his company and Tele-Communications Inc. (TCI), he declared, "the beat goes on," and outlined opportunities in interactive communications and media not in terms of "VR helmets" but in terms of "real opportunities." When asked by an audience member about possibilities for broadband communications to the home, Smith responded by hinting that his company will announce a "unique and flexible" option in the "next few weeks."

In his speech, Smith traced the development of telecommunications. Thirty years ago--when all phones were black :)--monopolies ran telecommunications, and the pace of change was conservative. In the mid-1990's, Smith observed, a month of change approximates the changes in a half-decade from thirty years ago. This pace of change, according to Smith, leads the media to characterize a new development as cliche before it is understood. However, Smith said that rapid growth in telecommunications is real---his cellular business is up 53% in the past twelve months, and now he sees opportunities from media convergence as well as competition from every industry sector. Since the 1984, the industry has shed a monopolistic, utility mindset to pay attention to customer needs, quality, and opportunities in intelligent digital technologies. By the late 1980's, fiber optics, microprocessors and operating systems for distributed databases gave rise to new service opportunities. Today, consumer communication devices---the computer, television, and phone---are merging. He characterized the Internet as an example of a laboratory for rapidly changing technology and culture.

Smith also talked about the reasons behind the cancelled Bell Atlantic-TCI merger. He cited intensified industry change and government actions as contributing factors. The announcement of the merger generated activity and speculation about other possible mergers in the industry. Cable regulations intensified---the fee cuts from last fall and this spring placed price controls on cable, leaving wireless and satellite entries in amore competitive position in the market. Finally, market uncertainties made the proposed merger less attractive. Smith emphasized that the cancellation of the merger does not mean that the "[information] superhighway is full of potholes." Bell Atlantic, Smith, said "will be part of" the developing global information infrastructure, as well as many other companies with opportunities---Oracle, Microsoft, Siemens, and IBM.

Smith stated the lessons he has learned from these developments. Perhaps alluding to the cancelled TCI merger, he stated that foolish consistency on one course of action is not a virtue---instead, a company must take a just-in-time/incremental approach, migrate, and be flexible. Smith also described the need for vision, in terms of internal alignment and commitment, to develop competencies and higher growth. Another of Smith's lessons is that "rain dance" approaches to business strategy and cultural change can over emphasize processes and disconnect a mission from a result. He cited examples: Total Quality Management programs and IBM's continued refusal to shift from the mainframe business. Competitive advantage, according to Smith, changes all the time, and innovation is the "only sustainable competitive advantage."

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