One company has quietly changed the business model for corporate telecom network maintenance by shifting a largely regional business into a national operation that competes with--and is a large customer of--service providers across the country. With its acquisition of NextiraOne in June, United Asset Coverage became the largest U.S. third-party maintenance company and more of a force with which to be reckoned.

UAC is a privately held eight-year-old company that has been steadily growing, both organically and by acquisition, by providing a comprehensive national network maintenance product that supports a wide range of customer premises equipment from multiple manufacturers. It is that breadth of coverage that initially distinguishes UAC from the many maintenance companies that exist locally and regionally, said Patrick Martucci, chairman and CEO of United Asset Coverage.

“The challenge for a distributor and maintainer of CPE is that they can usually only maintain one manufacturer’s brand--you have to pick a shop,” he said. “Say you are a Nortel shop--you have to have techs, trucks, parts, second-level tech center, engineering support--all pointed to that one manufacturer’s line. If you decided to also maintain NEC, you need to duplicate your company. Maybe get synergies in accounting, but the vast infrastructure cost would have to be duplicated. And that has led to single-vendor shops.”

UAC’s approach was to provide brand-agnostic coverage to large enterprises, many of which don’t operate just one kind of CPE, and so end up with multiple maintenance agreements based on the plethora of vendors’ equipment used or on different geographic regions, Martucci said. UAC set out to change that by contracting with 30,000 different maintenance vendors across the country and providing an integrated maintenance package to the corporate customer looking for simplicity and a lower cost.

“We’re sort of like a PPO [preferred provider operation] in the insurance industry,” he said. “The important thing is that we offer choice. The customer isn’t stuck with one vendor--they can choose any provider on a per-repair basis.”

UAC’s approach also enables the company to keep its costs low, since it is not trying to recoup lost revenues from low bids on original equipment, Martucci added.

“Things don’t break like they used to--mean time to failure is much improved, so theoretically, the price of maintenance should go down, but it hasn’t,” he said. One reason for that is that equipment manufacturers must compete on price to sell their gear and then often try to make up for lost revenue on their service contracts.

UAC has created a large Oracle-based actuarial database that covers all the equipment its contract repair companies maintain.

“We know exactly what parts and labor are going to go into that system,” Martucci explained. “We look at the inherent risk plus our margin and go to the street--our price tends to be 17% less than the market.”

Service providers are among UAC’s key vendors--and key competitors--as they are often bidding on the same maintenance contracts. Once the contract is won, however, UAC uses service provider maintenance units as some of its major contractors to do the work, and there is benefit in that approach to both sides.

“We are a very big customer of theirs--once we win the deal,” he said. “The incumbent maintenance provider becomes the person who gets moves, adds and changes revenue, upgrades, and many more revenue streams other than maintenance. All the things, new locations--all of the future revenue stream tends to ride with the incumbent. So we can both benefit from that relationship.”