| Time Warner Telecom: More than Words |
| IT | |
| Monday, 31 December 2007 | |
 Consistent, rapid growth in the telecom industry? Larissa Herda explains how this company is achieving the impossible.  Larissa Herda, Chief Executive The results led Atlantic-ACM CEO Dr. Judy Reed Smith to state, “From year to year there is always flux in the market place, but we have seen that Time Warner Telecom continues to deliver the kind of communications solutions and service after the sale that customers regard as valuable.” It’s what chief executive Larissa Herda describes as Time Warner Telecom’s consistency in performance—something all organizations in the industry strive for but few are able to achieve. And as the Metro Carrier Report Card proves, that’s not just CEO-speak. No silver bullet Headquartered in Littleton, Colo., Time Warner Telecom provides managed network services, specializing in Ethernet, transport data networking, Internet access, local and long distance voice, VoIP, and security, to more than 31,000 business customers across the nation. That’s a customer base that has grown significantly since Herda became chief executive in 1998: in past five years alone, Time Warner Telecom has enjoyed 19% compounded annual growth in enterprise revenue. So how does an organization in such a tumultuous and highly competitive industry manage this consistent, rapid growth? “There’s no silver bullet” Herda, said. “We’ve done a lot of different things to create the trajectory we’re on, things we’ve been working on for years. It’s a combination of investments in infrastructure, products, and people.” A strong example of that long-term investment mentality came in 2003 when the company doubled its capital spend to $200 million in an effort to expand its fiber optic network and Ethernet capabilities. It was precisely the type of investment forward thinking executives make and the instant-gratification generation of stockholders abhors. And while the short-term impact was a stock plummet, the foundation was laid for long-term success. Said Herda, “They didn’t see the immediate results in the next quarter and ran out on our stock. It went down into the $3 range. The market didn’t have the patience to wait, but by 2005, we began to see the top-line revenue grow.” Now, Time Warner Telecom’s enterprise revenue is the driving force as traditional carrier revenues continue to shrink. And with the acquisition of fiber-based Xspedius Communications in 2006, the company only added fuel to the fire. Expanding the footprint In October 2006, Time Warner Telecom completed its acquisition of Xspedius for $216 million in cash and 18.2 million shares of stock, opening the door to businesses in 31 incremental new markets. It was a match made in telecom heaven, as Time Warner Telecom was searching for a metro fiber-based company, and Xspedius was in desperate need of an infusion of capital. Time Warner Telecom approached the acquisition with three sequential steps in mind: people, network integration, and systems integration. First, the company assimilated a significant portion of Xspedius’ management team and kept them in leadership positions, making the deal less of an acquisition and more of a partnership. “They did some things better than us, and we incorporated those things,” Herda said. “We didn’t just swallow their company up.” Network integration came next followed by the hardest part, systems integration. Time Warner Telecom wanted both companies on one platform for key business processes like provisioning, billing, and network monitoring. Working together, the companies managed to complete the difficult task in record time over the summer of 2007, allowing for a seamless roll out of products in the fall. And while Time Warner Telecom managed the integration at a sprinter’s pace, it’s approaching its new markets with its signature marathon runner’s mentality. “Because the integration went so well, we decided to start investing in those new markets immediately to expand our product capability,” Herda said. “We won’t see the revenue growth from the investments we’re making now until next year. It takes time. But we’re approaching this opportunity in a very disciplined way. This will help us continue the growth trajectory we’re on for the next several years.” Opportunity may not be the appropriate term to describe the boundless possibilities Time Warner Telecom has for growth. With the expanded network footprint created by the Xspedius acquisition, the company now has more than 8 million businesses in the markets it serves. Of those, nearly 1 million are less than a mile from the network. “We have roughly 31,000 customers today, so you can see the tremendous opportunity we have to continue to grow, just with the networks we already have,” Herda said. “We’ll strive to make those networks better and make the services we provide better.” If Time Warner Telecom’s existing customers have any say in the matter, the company’s growth is virtually guaranteed. In a recent survey, 81% of Time Warner Telecom’s customers said they were “extremely willing” to recommend the company to others. Herda attributes the landslide of support to the company’s laser-like focus on serving the business customer. It’s a focus the chief executive said Time Warner Telecom would never waiver from, no matter how quickly or how big the company grows. “When you have an organization that’s focused on the customer at the fundamental level, it dictates everything you do. We want to be the carrier business customers go to for the best value and the most innovative services.” As Time Warner Telecom’s satisfied customers, industry observers, and track record attests to, that’s not just CEO-speak. |
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American Executive is a RedCoat Publishing publication.
American Executive is a RedCoat Publishing publication.
