Telcordia

Dan Carroll assumed leadership of Telcordia as president and CEO in September 2005, a time when Telcordia, its customer base and its field of competitors were embarking on major transformations — whether they knew it or not. With merger mania in full swing, the operations support system market looks very different today that it did when Telcordia lured Carroll out of his brief retirement. He recently spoke with Telephony's Tim McElligott on the year behind and the one ahead.

On the state of the business: This is a challenging industry, and it will continue to be challenging as we look ahead. The consolidation we are seeing of our customer set is just one piece of that challenge. The consolidation we see in the supplier set will continue to make things difficult. Plus, we're in a time — at least in the U.S. market — of tremendous change in focus by our customers who want to provide a full suite of solutions like broadband, TV and telecom. So it's like this huge coming together of many factors to make the market challenging. At the same time, we're comfortable that this last year has been a year of investment in our product sets. And I think that it's turning out to be very fortuitous that we started this a year ago. We have had nice growth [in 2006] in our next-generation revenue and have done exciting things in our core products that have been well received by our customers.

On the mobile virtual network operator model: We signed a significant amount of MVNO customers this year that we are providing hosted services to. We'll be watching the holiday season results to see if the customer growth met expectations. Through this year, they were reasonably on track, but I think the real test is yet to come. The jury will be out for a while, waiting to see if they get the growth and sustainability. But we are seeing significant growth in our hosted solution so we remain bullish on that.

On the return and challenges of the solutions suite: Once you go to a product suite, you have to ensure all your products are the best because that's where you're going to get attacked. You have to be able to withstand an individual product attack as well as have the ability to bring products together. Our goal was to make all our products one or two in their space. I believe we have done well with individual products and invested last year in pulling them together into a single solution because customers are looking for a broader set of solutions. They are finding out that buying best-of-breed solutions and integrating them themselves is not as easy as it sounds, especially in Tier 1 networks.

On revenue and acquisitions — or not: We met the objectives we had for the year. There are certain expectations in the market place we have to achieve and we are pleased that occurred in 2006.

We will continue to see some decline in the U.S. market for legacy core systems, but we are seeing the power of knowing the network so well in terms of our other business. [As for merger activity,] when we have something to announce, we will be happy to announce it. We can never win commenting on what people are saying. We look at acquisitions to see if there are things we could not do internally, and so far, we decided the internal route was the play.

On his first year: It's been an exciting year. These are great people here. Their technical competence is amazing and the dedication and hours people put in to resolve issues is just as awe inspiring as it was in the days of the Bell System. It is a pleasure to work with folks who are so dedicated and accomplished and so focused.