Notes from Tycom cc so far. (Still listening. . .) Note how many route kms they're putting in. For those who don't know, Tycom is one of SDLI's top three customers and SDL provides some of the enabling technologies for Tycom's success.
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Tycom Analyst Conference Call, Nov. 9, 2000
A lot of amazing things happening in this building. Will go through a few issues, then introduce other speakers.
Only builder, owner, operator in this industry. Will take tech to market faster than competition. From 2 years down to 12 to 14 months. We know systems. Years of experience. Do all own manufacturing. Test all systems. Install and maintain them. Two new ships coming in 2001, and four more ordered for 2002.
Will maintain our technology leadership. 9 to 12 mos. Ahead of competition. Will expand leadership edge. Want as much capacity as possible so we can drive down cost. Will grow R&D. Solely devoted to undersea photonics. Are winning large contracts. 1.3 bill part of TAT system.
Core competency is undersea. Competition is buying own ships to do the same thing. System integration is second to none. Very successful at that. We integrate with competitors products. Operations and maintenance is key going forward.
Advantages: technology, capital investment is staggering to get into this business, cost of ships, etc. need deep water port next to factory. Human resources. Need knowledgeable people. Leading edge of industry. Systems must last 25 years.
We’re vertically integrated. We don’t make components. We buy them and integrate them into our systems. We build, install, and maintain systems. We see lower costs. We don’t rely on third parties. We have capacity and resources. We have manufacturing assets. We deploy where we need them, when we need them. Reduced time to market. We’re building for ourselves.
We’ve been here for 50 years. We have better technology than competitors. Scalable platform. Not everyone’s needs are equal. Fully funded business plan. 2bil from IPO. Have working capital and adequate cash flow. Don’t have to go back to market for additional funds.
Strategy and execution equal success.
Now we are taking Tycom global network into tele-exchange centers in the cities. Why? Because we see smaller carriers who don’t have terrestrial networks and who need us. Tycom has been structured 1) developing products 2) construction and maintenance, teams who run our ships 3) factory organization, cable, undersea repeater, and repeaters 4) networking engineering and operations who run networks. We have a project management organization that focuses on projects. They don’t look at specific functions but look at projects.
Tycom is so successful at working with third-parties, we’ve given project managers specific rings to manage.
Tycom Global Network: by 2005 250,000 kms undersea linking 6 continents. First phase 70K kms, in 2001 and 2002. Project by project basis: Tycom Transatlantic with a loop into Northern Europe. By 2Q 2000 we had purchased property from cable stations. 3Q 2000 all equipment ordered both internally and externally. Northern Europe agreement in place. Ground-breaking on cable station. 4Q, backhaul leases going in place, fitting equipment, getting ready to load. Operations beginning to be installed at the same time. Billing, operations, and so on being put in place. Everything is on target. Tycom Atlantic N. Euro piece has project management team in place now.
Tycom Pacific is part of Phase I. Goes in place May 2002. Will be biggest system because of growth of demand in Asia Pacific. Already implementing system.
This is only third-party systems. While working towards Tycom global network we have revenues from other projects.
Sales Organization: taken people who’ve sold systems and made a sub-organization. Fiber sales on that.
Capacity sales organ., have focused on people who have capacity sales experience. Also who’ve worked with ISPs and ASPs. Have business development organization, sales and marketing org., focuses on bigger relationships. People asking about Teraworks and want exchanges for capacity.
All targets on schedule. Sales strong.
Peter Runge, technology R&D operations:
Designed and deployed first fiber optics system ever. Led 6 more transatlantic cable systems. Built 300K km of undersea systems. In R&D 15% have PhDs. Applied for 50 patents this year. Have set ten transmission records, one after the other. Know how to partner with customers. What used to take 4 years we can accomplish in 1 ½. Our people are not just dev. tech but are in factories when we need them. They’re in field, helping to solve issues. We design equipment here and throughout org. First transatlantic cable, first fiber optic cable, first DWDM cable. World leaders.
Tycom Global Network will be the largest in world, touching more population centers than anyone else. Lowest cost per bit in any segment of network. Fastest services provisioning. All services capability on network. STM1 to Wavelength and fiber pairs. A lot of interest in purchasing capacity in chunks. Will offer portability. Will be able to move around.
DWDM transport equipment, is special because we have to transport wavelengths without regeneration, across Atlantic, across Pacific, and some places even longer. Power feed equipment to power amplifiers sitting at bottom of ocean. Network management equipment we do ourselves. We buy equipment that is available from vendors in terrestrial sector. [Describes typical cable.] Develop power feed equipment. Terminal transmission equipment. Line monitoring equipment. All-optical monitoring equipment. Allows us to locate faults in amplifier or cable. Developing software and hardware for monitoring. Pacific will incorporate repeater for 8 channels. High performance optical equipment: we are developing it here. Special in terms of capabilities --- must travel over 10,000 kms. Key enabling technology: forward error correction, amplifiers at high speed, grooming optical signal for amplitude, phase, and wavelength. Control must be maintained over life of system. Difference of about 4 years between lab and deployment. Now shrunk to 3 years. Core competencies are concentrated in four areas: DWDM over ultra long distances, 10K kms plus. We have lead and lowest cost. Forward error correction coding, EDFAs, we buy components and put them together into amplifiers. Network management --- we have software/engineering teams.
Future trends: All sold at 10 gigs per second. Nothing at 2.5. Investigating 20 and 40 gigs per second. Mfg. At 8 pairs. Looking at 16 and 32. Looking at network management strategies. FEC coding: we have in production second generation and Gen3 under development, Gen4 under investigation. Now 36 and 98 nms under investigation. Looking at new fibers. Having them developed to our requirements. Two recent accomplishments: ? ( Missed this) Have done 20 gigs, 56 wavelengths over 6200 kms.
FEC: [explains process]
Dispersion sloped matched fiber --- allows capacity increases. More than doubling capacity. China-US market increases capacity tremendously. Working with key fiber vendors. We will be first to deploy.
Terrestrial to submarine: Terr designed for 600 km, and then regenrate. In submarine we’ve focused on long distances. Developed key competencies. Everything influenced by distances. Accumulation of fiber impairment and requirements of high reliability. That’s where we excel. New market has been addressed through TeraWorks. Optical network undersea will migrate to mesh restoration which will increase capacity available. First part you have to set aside half for restoration. In mesh you only have to set aside 1/3. This requires new elements: optical cross-connects. IP is going to be predominate type of traffic. Working with router vendors. We have set demonstrations of pure IP over network.
Leading edge solutions: We are well positioned for TGN. [Lab being launched.]
Summary:
Experience from 300K kms undersea worldwide. Four generations of tech in use. Demonstrated in lab leading edge technologies and can bring it to market at lowest cost per bit. Will have new networking techs in our system, network management in development.
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