Top 100: Telecom companies fall in rankings

When Harris Corp. won the Federal Aviation Administration Telecommunications Infrastructure contract last July, it was another sign of how the systems integration and telecommunications markets are converging. And it appears, at least for now, the systems integrators are gaining the upper hand.It isn't that telecom companies are selling less to the government, but that they are taking on more subcontracting roles, said James Kane, president and chief executive officer, of Federal Sources Inc.Nearly all the telecom companies on the Top 100 list this year experienced a drop in the rankings, with the notable exception of WorldCom Inc.AT&T Corp. dropped from No. 19 last year to No. 31. Verizon Communications Inc. fell from No. 34 to No. 43, Sprint Corp. from No. 43 to No. 49, and SBC Communications Inc. from No. 57 to No. 89. Qwest Communications International Inc., which was No. 74 last year, is ranked No. 90.WorldCom, which rose from No. 12 to No. 8, will continue to be a strong competitor for transmission services because it will emerge from bankruptcy having shed its debt, said Warren Suss, president of Suss Consulting Inc. in Jenkintown, Pa.But Suss also said WorldCom will lose ground to systems integrators on upcoming opportunities that encompass more than traditional telecommunications services. "More and more deals are going to cover areas not covered by transmission alone," he said. A case in point is Harris' FTI project. Harris battled and beat two other teams for the $3.5 billion contract. Fellow systems integrator Lockheed Martin Corp. led one team, and WorldCom, the incumbent contractor, led the other.The FAA had connected its more than 5,000 facilities around the country with dedicated, leased telecommunications lines. When it wanted to add a new feature or service, it would lease another line, said Joe Sleiman, business development director in Harris' communications and systems division.With FTI, the plan is to integrate those communications systems into a single, more easily managed system."The customer now is not looking to buy another T-1 or another T-3, but he is looking for somebody to provide them an architecture and give them a business offering, and pay on performance rather than by the circuit," Sleiman said.Harris, which has Sprint and five regional Bell operating companies as teammates, doesn't plan to sell the FAA more lines. "That's not our business," he said. "What I'm going to sell is a better way to get communications done from Point A to Point B. ? The architecture is what makes the difference."Use of that model is growing, and systems integrators are taking the lead in those kinds of projects, he said.Sleiman pointed to the Pentagon renovation project, where Verizon is the largest provider of telecom services, but General Dynamics Corp. is the prime contractor."We weren't the first," he said. "But certainly we see more. That is why we are optimistic that the win of FTI gives us the credentials to be the integrator of telecom services at any agency."