From the boardroom to the engine room - Company Business and Marketing

The major consultancy companies are upping the ante in the telecoms network integration market, aiming to take on operators in their own back yard. But can they win? Joanne Taaffe looks at the transition to 'next-generation' network integration and finds out how much substance lies behind the slick new face.

The white, minimalist interiors of Arthur Andersen's offices on London's Strand buzz with well-dressed young strategists, hot-desking at bar-stools, bent over their ultra-slim notebooks on a counter high above the busy London street. The meeting room, furnished with a modern, brightly colored sofa, is as small, chic and subtly-lit as a trendy hotel lobby.

But behind this slick, new economy style lies a very serious strategy to win new business from incumbent and new-entrant telecoms operators alike, which has seen Arthur Andersen Inc. and its competitors PricewaterhouseCoopers Ltd. and KPMG Ltd. launch new, dedicated divisions and take on new networking skills in the last few months Consultancy and integration specialists are gearing up for a new market opportunity: providing 'new age' network integration expertise to telecoms service providers.

Their bold aim is to provide telecoms companies with integration skills and associated consultancy, from the nuts and bolts of the network right up to the highest strategic considerations. Alan Taylor, chief operating officer of London-based KPMG's Service Provider Solutions division in Europe, a joint venture established with San Jose, California-based Cisco Systems Inc. last year, sums up KPMG's attack as offering technology and business services "from the board room to the engine room".

"We have more knowledge than the incumbent coming from voice," claims Taylor. "We're starting in the new world and re-integrating circuit-switched [networks]."

But reactions from some network operators suggest that it will be a hard struggle for KPMG and its peers to convince potential customers that there is sufficient networking substance beyond the style, or that there is a need to farm out such skills.

"I would find it strange to outsource the design and implementation of networks," says Laurence Huntley, Atlanta, Georgia-based vice president of marketing for Equant NV. "One of our strengths is our ability to test industrial strength equipment," he stresses.

Of course, the big consultancies are not strangers to telecoms operators, nor integration. Auditing aside, they have been integrating billing and customer relationship management software systems and providing business consultancy to operators for many years. Now, though, they are going a step further and establishing divisions to focus on the design and development of what PricewaterhouseCoopers (PWC) calls 'new world networks' (see box, p18).

"We hit a watershed about eight months ago when people realized they had to move with broadband networks," says Sandy Aitken, PWC's, director of e-business and IP solutions. After 25 years in telecoms Aitken has seen how networks have evolved and the integration skills that are now required. What 'new world' broadband IP networks provide is "a lot more control and reduction in costs and the ability to measure quality of service," said Aitken.

Anticipating increased demand, PWC and KPMG earlier this year took steps to set up network solution centers in the UK, Here, operators can trial new technologies such as Asymmetric Digital Subscriber Line (ADSL) or third generation (3G) networks. Meanwhile, Arthur Andersen is increasing the number of telecommunications specialists on its payroll to "set strategies, manage and execute strategies," for operators through structures such as its Mobile Commerce division. Unlike PWC and KPMG, however, Arthur Andersen is not investing in networking centers. Instead, it is looking for growth in more traditional consulting and application development services.

KPMG, however, believes that the network planning, integration and hardware market is poised for rapid growth. "Our position is that we see a market that is going to expand very significantly in the next six months to a year," says Taylor at KPMG, which opened its IP networking center at a cost of [pound]20 million (S30 million) in Stockley Park, England, in June.

Narrowing the skills gaps

PricewaterhouseCoopers, meanwhile, will officially open its Network Solution Center near Heathrow Airport in September. Its focus on 'new world networks' casts a net over technologies which operators are moving to implement, but for which there is currently an acute shortage of skilled engineers, including ATM, 3G and DSL.