Let the competition begin - Belgacom North America Pres Susan G. Mirbach discusses deregulation of the telecommunications industry - Industry Trend or Event - Interview

I think that any country that puts severe restrictions on the way people can use the Internet will end up inhibiting their own economic growth and industrial development.

Susan Mirbach stands before a map of Europe, eyes scanning familiar ground as she discusses battle tactics. It would be easy to imagine her in another time, evaluating a theater of war our fathers knew too well. She studies the terrain. She knows the players, their alliances, what their next moves will be. She is both strategist and tactician in a high-stakes game.

But this is the late 20th century, and as president of Belgacom North America, American-born Susan Mirbach is leading her company and clients through a new conflict--the battle for telecomm market share in a soon-to-be deregulated Europe.

She finds echoes of the deregulation "wars" that wreaked havoc among long distance carriers in the United States after the breakup of AT&T. She hopes to steer a path through the mine fields that lie ahead, helping to chart a course for the future based on the bitter lessons American carriers learned in the '80s. When commodity pricing enters the arena, service tends to be the differentiator, Mirbach believes.

Mirbach ranks American carriers highly in terms of operating efficiency. "The American carriers, long distance and RBOC, tend to be stronger than any other carriers in the world. If we can become as good as America in Europe, we'll be the most efficient operator here," she says.

As European operators lose end-to-end control of their networks and their customers, she worries about more finger pointing among them, because many will become simply value-added resellers, offering services that will not be facilities-based.

She believes European network operators will weather the storm. "I think the savvy Europeans have a pretty good understanding of what's going on.

"Our team is primarily American--that's very unusual--but most of the Americans actually are bilingual or multilingual," she says. In fact, Belgacom North America is the only European carrier with offices in the United States led by an American, rather than by an expatriate.

"What we do here is focus on customer service and making thing happen, making sure our clients are getting the information they need," Mirbach says. "We're looking at opportunities to better service our existing client base--and to attract more clients, bringing American companies to Belgium that aren't already there, through a service like call centers."

In provisioning call centers, Belgacom coordinates all of the provisioning parties: the government, the temporary agencies, the headhunters, the real estate people and the telecomm part. Mirbach thinks it makes sense for companies considering an international call center to contact an international carrier, like Belgacom, for consulting services.

"We have positioned ourselves over the last eight years to be a source of information, Mirbach says. "We're reliable, we're honest and we really have the facts."

Judging the success of her company goes beyond the numbers, she says. "It's the whole client satisfaction consideration, that for us is extremely important. That leads to client retention. If your clients are happy, they'll stick with you. So, for us, I would say client satisfaction is the most significant determinant for judging success or failure. That leads to the others, the other quantitative objectives."

LIBERALIZING THE NETWORK

The European Council of Telecommunications Ministers set a timetable for fully liberalizing voice telephony by Jan. 1, 1998. After liberalizing terminal equipment and all value-added services, the European Union (EU) has paved the way for a true single market for telecommunications.

"In fact, if the EU directives are implemented as planned, the European telecomm market will be much more competitive than the American market, "because everything is being opened up: local, long distance, international, everything," Mirbach says.

Belgacom has been positioning itself for deregulation, she notes. One of its key objectives was to "fix the factory," a term for becoming a highly efficient operator, in order to be competitive.

"So there was less emphasis in the last 12 to 18 months on developing new products and services with all the bells and whistles, than to actually shortening installation time frames from 10 days to two days," she says.

She thinks this is the right approach. "It's going to be hard to take away business from the highest quality provider. I think the sale of 49.9% of Belgacom to these world-class carriers is also a significant advantage to helping Belgacom prepare."

Somewhat fatalistic about retaining market share after deregulation, Mirbach notes, "There is nothing you can do to save all of your market share. When you have a regulated monopoly, and then it's taken away, the only thing that can happen is the loss of market share."

She thinks providing high-quality service and pricing competitively are the best antidotes for that potential loss, along with getting into some other businesses. Belgacom is following the example of one of its partners, Ameritech, by planning to enter the securities business.

To compensate for the inevitable loss of market share, operators will have to enter other carriers' markets. For example, if PTT Telecomm Netherlands were to lose one-third of its market share, all the carrier would have to do would be pick up one-tenth of the market share in Germany to make it up. Reflecting further on this model, she observes that PTT Telecomm probably would enter markets in several countries--"I think you're going to see a lot of that."

Mirbach believes there's a place for luck in the marketplace. "A lot of success actually comes from being lucky, being in the right place at the right time, making the right choice, choosing the right equipment, choosing the company that stays in business, not the one that doesn't.

"There is a significant, identifiable shift of traffic from the traditional applications to Internet applications," she says. "Internet requires very significant bandwidth, so we're all profiting from that right now. I wouldn't say international carriers more than American, but since so many of the ISPs and databases are here in the United States, there is a lot of traffic coming back to the States. So we have to build a lot of bandwidth, in Belgium and in the United States. That's good for our business."

Mirbach is certain that voice over the Internet is going to happen. "It's not going to happen tomorrow, but within a reasonable time frame, improved quality will make it a reasonable approach."

On government intervention in the essentially free-market spirit of Internet traffic, she says, "I'm personally not worried about national governments levying charges for, or regulating, Internet traffic. I know, for example, the United States is actively lobbying various governments not to do that. I get the impression that once the various governments understand the idea, they tend to agree.

"I think that any country that put severe restrictions on the way people can use the Internet will end up inhibiting their own economic growth and industrial development. So I don't think it will be worth it. When commerce based on the Internet will somehow be taxed, through actual sales, I think somehow, governments will wind up making their numbers," Mirbach says.

She expects satellite technology will introduce "...new ways of working. I think it will bring special tools and abilities to remote locations. You will have a top surgeon being beamed into an operating room because bandwidth is there and relatively cheap," she says.

PARTNERING AND COMPETITION

Noting the complexities of doing business in Europe, Mirbach says, "You have to remember that Europe is not homogeneous. For example, in France and Germany, they have a very strong and very integrated business-telecomm industry. For all kinds of reasons, Lucent and Nortel are much less successful in France than Alcatel is. Same thing in Germany with Siemens.

But she still sees successes for American business in Europe, especially in areas where there isn't a strong indigenous industry.

"In Belgium there is virtually no indigenous telecomm industry, nor in the Netherlands. So the American technology, by the nature of its quality and performance, is much more widespread.

"Where they have been able to get into the market, American manufacturers have been successful," Mirbach continues. "There are Lucent central office switches and PBXs all over the place. Motorola wireless equipment is extremely popular, with high penetration. I don't think there is a carrier out there that doesn't have Cisco routers in its network."

Partnering is a structured form of competition, she says, noting that partners often make strange bedfellows. "You see it both ways: Ameritech investing in Belgacom and Deutsche Telekom and France Telecom investing in Sprint.

"Belgacom's fiercest domestic competitor in Belgium is called Polinet Flanders," Mirbach says. "And who is its strategic partner? US West. There you've got US West and Ameritech going head-to-head in Belgium."

RELATED ARTICLE: MEET SUSAN MIRBACH

Susan G. Mirbach has been president of Belgacom North America since April 1990. As president, she is responsible for Belgacom's North American operations. Formerly director of marketing and major accounts for France Telecom, she managed the carrier's marketing efforts for four years.

Before joining France Telecom, Mirbach was a faculty research associate at INSEAD, the European Institute of Business Administration in Fountainbleau, France, and has served as a consultant for Coopers & Lybrand, based in Washington. D.C.

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