Setting standards

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Sir Terence Matthews, chairman of Mitel Networks has invested in, directed and steered the company to become a significant player in the area of IP communications.

In his most recent visit to the Middle East, he discussed with NME Mitel's work for enterprises and his plans for the company in the region and globally.

How do you believe technology has changed and evolved in the last few years? How has Mitel capitalised on this change?

Timing in life is incredibly important. Mitel was the first company to use intergrated circuits to make active filters, so instead of 2 to a 19" rack we could put 19 to a 19" rack and we cut the cost from US$1500 a unit to $150.

And the timing was right. Mitel in ‘76 was the first company to make microprocessor controlled PBXs and therefore software driven PBXs. So our PBX very quickly had hundreds of capabilities, not just a handful.

Things which were good for hospitals, hotels, doctors - there was a long list of special things that no one else had ever thought about. And we could do these things because they were software driven, not hardware.

In Mitel all the characteristics were software driven and the company very quickly went from being a nobody in 1976-77 with no market share, to having 20% five years later.

These are the kind of things that can happen when there is a technology jump. We face a similar technology jump now as we move from narrowband. This time it is not granularity around the planet of switches and transmission facilities for voice, this time around it is broadband because technology has jumped.

Whether it is through technology like wave division multiplex as an example, ADSL that takes twisted pair wiring and dramatically expands the bandwidth by piggy-backing signals, whether it is WiMAX, satellite or radio systems, the world of broadband in the last ten years, and even more significantly in the last five years, has exploded.

Let me give you another point. DSLAMs (digital subscriber loop access multiplexer) was around $1000 when it was introduced. I saw a recent tender at $9. It does not take a mathematician to know that this is one percent of $1000.

The truth of the matter is that when something gets down to that low a price, the message to you is that not only will it never go back but deployment will accelerate because it is at such low cost.

So the deployment of broadband networks is accelerating because the cost point is very low. And this means that it is so much easier to connect people, whether it is WiMAX, whether it is WiFi, whether DSL or cable modems.

Worldwide this is a phenomenon which is in full swing now. And the cost point and competition that goes with it is ferocious; service providers of all kinds are in this business of providing broadband. Then the issue becomes -now what?

In the year 2000 we began investing very aggressively in Mitel. In the last few years we have spent about $600 million completely transforming the product line to an all IP product line. We are now the largest supplier of IP PBXs.

And we have addressed certain verticals. The retail vertical, the finance vertical, the education vertical, the transportation vertical - certain verticals where we introduce features and functions which are very special for those particular organisations.

And it is showing. The company is doing very well. The revenues are now close to a billion dollars a year. Profit's coming up as volumes increase - the cost of goods sold goes down as volume increases and the overall volumes sold in any event with various vertical apps that add more value are on the rise.

What products is Mitel working on? What can we expect in the near future?

Communications, as well as features and functions which are specific to particular verticals, are the issues. Mitel is the first company to make an IP turret, a trading turret for trading floors.

This is up to 20 turrets, we have not gone to the big ones yet. Usually PBX makers connect using trunks and a protocol called QSEG, that allows the interaction between systems. With Mitel you don't need to do that. It is all part of one system.

Mitel is introducing a retail terminal soon which will allow clients to come into a store and with an electronic terminal, determine where the product is that they need to buy and if they have any issues, they can press a button which will connect them to a department supervisor.

So for the first time customers and retailers can do things that they could never do before.

You can do video that you could never handle before. Later this year we will introduce video walls. What we have done is create video walls out of flat panels with video cameras, where three cameras merge the image. They are in trial at this time.

They are not in such a manner that you have to say ‘oh at 4pm we have a video conference. You can just leave them on. Nothing much moves in a room often and the actual amount of movement that you have to transmit down the network is quite a light amount.

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