Va. firm vies with Bell for business

Teligent offers phone, Internet services in 23 markets now

February 09, 1999|By Mark Ribbing | Mark Ribbing,SUN STAFF

Another start-up telephone company has declared its intention to steal Baltimore-area business customers from Bell Atlantic Corp.

Teligent Inc. of Vienna, Va., launched its Internet, long-distance and local phone services yesterday in Baltimore; Richmond, Va.; West Palm Beach, Fla.; and Milwaukee. The company operates in 23 markets.

Teligent is one of a new wave of phone companies called competitive local exchange carriers, or CLECs. These companies are trying to take business from the regional Bell companies that dominate local phone markets nationwide.

Generally, CLECs go after business clients rather than residential customers because businesses spend more on telecommunications and are often conveniently clustered in downtown areas or big suburban industrial parks that are easy to serve with a limited network.

This is the strategy Teligent has embraced, marketing itself particularly to small and medium-size businesses while ignoring, at least for now, the residential market. Ultimately, the company intends to establish itself in 40 metropolitan areas around the country.

Teligent President and Chief Operating Officer Kirby G. Pickle Jr. said his company had not planned to enter the Baltimore market until late this year, but then decided to do its area rollout much sooner.

"Baltimore is such a good market. The economy is doing fairly well there," Pickle said. "So we moved Baltimore up on the time schedule."

The company now is serving 20 buildings in the area, mostly in Baltimore and Towson, and plans to expand. Teligent has about 20 employees in the Baltimore area.

While Teligent is part of an increasingly crowded CLEC field, there are a couple of factors that set the company apart. First, the company has a shiny top brass. Chairman and Chief Executive Officer Alex J. Mandl is a former president and chief operating officer of AT&T Corp., while Pickle had been a president of UUNet Technologies Inc., a major Internet access company that was bought by what is now MCI WorldCom Inc.

Teligent's management, and especially the presence of Mandl, has allowed the company to attract attention and funding out of proportion to its size.

"They've got, in my view, a very strong management team that has really been involved in the competitive telecommunications industry," said Riyad Said, an analyst with Friedman, Billings, Ramsey & Group Inc. in Arlington, Va.

In addition, Teligent has taken an unusual technological approach to selling local phone service.

Rather than relying solely on fiber-optic or copper lines, Teligent primarily uses microwave signals to bounce calls along a line-of-sight network.

Such a system has its draw- backs, such as a reduced ability to transmit signals over long distances.

However, while Teligent is using more traditional network systems for its long-distance traffic, it says that its microwave infrastructure works well for local calls, and can save customers lots of money. Pickle said his company's aim is to offer customers 30 percent reductions from their current telecommunications bills.

Bo Fifer, an analyst with BT Alex. Brown Inc. in New York, said microwave wireless has an inherent cost advantage over the more common fiber-optic approach.

"The reason wireless is attractive is that fiber is so expensive to lay," Fifer said. "The economics of building out a wireless system are much more favorable than the economics of wiring with fiber."

Pub Date: 2/09/99

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