Challenge

TMNG Global’s client was a non-facilities-based CLEC with headquarters in a major metropolitan area. Another communications services provider, based in the same metropolitan area, had been providing local services but had recently filed for bankruptcy. This company was facilities-based, using switch, co-location, and leased transport facilities. Our client had an interest in purchasing the assets of the company, but bids had to be submitted within days. The client asked TMNG Global’s assistance in evaluating the viability and value of the network and its support systems and processes.

The TMNG Global Solution

TMNG Global’s assessment focused on four major areas: (1) network reliability and design, including expansion plans, network scalability, and the associated costs of executing required configuration upgrades;  (2) the operational metrics by which the company measured the performance of its network services, including circuit availability, mean-time-to-repair, and other standard industry performance measurements;  (3) OSS/BSS scalability, level of automation, and existing performance issues;  and (4) costs associated with future expansion and integration.

TMNG Global conducted high-level interviews with various members of the company team, including representatives from finance, operations and provisioning, service delivery, business development, customer service, and systems and technology. Telephone interviews were conducted with the company’s primary vendors, including representatives from Siemens, Lucent, and ADC.

On the network side, costs for the existing equipment and facilities were determined as well as hidden costs—for example, existing leased facilities agreements essential to network connectivity. Some of the agreements, such as maintenance and service arrangements, would need to be renegotiated by the purchaser of the assets. TMNG Global explored opportunities for network optimization to determine if network coverage and capacity could be maintained at an improved operating cost.

TMNG Global examined the corporate infrastructure, including the various OSS and BSS systems. At the heart were the DSET, MetaSolv, and ADC/Saville systems. TMNG Global determined how these systems were implemented and to what extent the overall processes were automated and/or integrated. Of special interest were Billing & Collections, Fraud Management, and Revenue Assurance. Specific issues were investigated, such as the number of billing records that ended up in the error file and how they are resolved.

TMNG Global determined that the company’s switching platform and network backbone appeared to be reliable.  However, there were no metrics applied, no reports generated, and few, if any, practices in place that would allow for complete confidence in reliability and design. TMNG Global provided a series of recommendations to improve the scalability, efficiency, and long-term viability of the network.

TMNG Global also found that although the company had some of the better names in OSS and billing systems, the systems were neither fully integrated nor implemented. Hence, the level of automation was minimal. Also, it was doubtful that current company employees had the experience to bring these applications up to peak performance. As in the case of the network, a series of remedial recommendations were provided.

Benefits to the Client

TMNG Global was able to provide the client with an understanding of which assets had value and which did not, based on the client’s business strategy. TMNG Global also alerted the client to a number of hidden costs that would be incurred, not least of which was a staff trained to manage the acquired systems. Furthermore, TMNG Global estimated that the remedial costs—required in addition to the bid costs—would range from $1.5 to $2 million and take six to ten months to implement.

As a result, the potential investor was able to better determine the true cost of the company assets. Its bid price reflected a realistic value of the assets and allowed the client to properly incorporate the potential acquisition into its modified business plan. The client also had a clearer view of issues down the road, such as remedial actions and renegotiations with vendors.