A Denver-based company has caught the attention of price-sensitive mobile phone carriers as well as some big manufacturers.
Cactus Integration Group, incorporated Aug. 1, provides integrated, turnkey site development solutions to wireless carriers. Services range from site identification and acquisition to engineering and installation services.
“We feel we’ve developed a new model on how to provide end-to-end solutions,” said Carey O’Donnell, vice president of marketing and sales for Cactus. “We looked at the industry as a whole and how it addressed [buildout]. Choice one: the carrier could go to a large company like Lucent (Technologies Inc.) or Nokia (Corp.). The problem is that these companies have a big focus on [radio-frequency] technology and communications technology. The drawback is high internal costs, expensive solutions and most are subbing out the front-end work. On the other end, the carrier has to act as his own general contractor and sub out the work. Increasingly, companies are downsizing, and there’s not enough resources internally to get the job done. We’ve created a model that combines both approaches … The response has been overwhelming.”
Cactus was founded by the principals of five separate companies that individually provide a wide range of products and services to the telecom industry. The company has aligned itself nationwide with regional companies that specialize in certain areas such as engineering and construction. Customers can take the company’s entire package of services or pick and choose services they want from a menu. Since Aug. 1, Cactus has gained about 12 active customers, and projects strong sales in 1998.
“We’re set up in almost every region of the country. Cactus has control of the partnership, program management and training that large regional companies get. We’re using players that know that market. The benefit to the customer is that it is a far more cost-effective solution,” said O’Donnell.
A number of companies that provide some similar turnkey solutions have popped up regionally across the country within the last few years, and some have promised services they couldn’t deliver, said Cactus President and Chief Executive Officer John Conley.
“We have to be very selective in who we align ourselves with,” he said. “Some don’t have the standards or capabilities to work. We’re bringing a discipline to a chaotic market so that users can feel assured they are getting the same standards throughout the country.”
Cactus recently caught the eye of Lucent, which has signed the company on as its E&I vendor, said O’Donnell. Lucent traditionally has performed engineering and installation services internally. As installation rates and financing continually increased, Lucent could not afford the cost and opted to outsource those services to Cactus, said O’Donnell.
“Lucent realizes that the economics for wireless carriers are different for those of the RBOCs. It seems that the only people willing to pay for the full Lucent program are the RBOC-type companies. All the new startups are not willing to pay the high rates for installation. Lucent furnishes the hardware, and we come in and do engineering and installation. [Lucent] didn’t want to have to deal with regional companies. It has one company taking the responsibility,” he said.
Realizing that swift buildout is crucial to most PCS licensees, Cactus also has established an association called The Telecom Alliance that is designed to give carriers access to a range of competitive product solutions-like batteries, towers and radios-and drive down costs associated with traditional turnkey providers. Carriers currently have limited choices in terms of how best to build out their networks quickly and efficiently, said Cactus.
“With the total project or cell site application, each manufacturer that provides a product into that only provides a certain segment of that,” said Conley. “We encompass the whole scenario. It’s appealing to these manufacturers because it’s an alternate channel of distribution into a market they are not able to compete in.”
The company hopes to attract 20 to 30 vendors that manufacture products specifically for network buildout. It has established standards for membership that require manufacturers to have a quality-driven focus and to specialize in one product area. So far, the company has officially signed up four members, which include some big manufacturers, said Conley. It expects to add another 12 companies by the end of the year.
