The new CEO of Tekelec (TKLC) , Ron de Lange, took a few minutes to talk with RCR Wireless News concerning Tekelec’s new direction the company will take with de Lange at the helm.
It’s safe to say that de Lange has some tough decisions to make. The Morrisville, N.C.-based company’s profits hit the $15 million mark in 2010, a major drop from $47 million the year before. Company records from the first quarter this year show that Tekelec had revenue of $107.8 million, down 7% from a year earlier and losses of $16 million. The company’s stock is also down 38% in the last year and de Lange must stop the blood loss to give Tekelec the chance to turn things around.
According to a filing with the Securities and Exchange Commission, de Lange will earn an annual base salary of $450,000 and gain the equivalent of 175,000 shares in restricted stock that vest in the next four years.
The new CEO is charged with breathing life into Tekelec since Eagle, its biggest product line, dropped abruptly in 2010. De Lange arrives at the top post with the departure of interim CEO Krish Prabhu, who helmed the seat after Frank Plastina resigned in January following a five-year stint. The software the company crafts for fixed-line and wireless operators will be forced to make major adjustments, and de Lange knows it.
“While we support our global base of voice and text customers, we are planning to differentiate ourselves by spending R&D dollars towards product innovation,” de Lange said. “We are singularly focused on the video and data control plane for mobile operators – we’re not a jack-of-all trades.”
After 24 years with Lucent Technologies, de Lange landed at Tekelec in 2005. As the new figurehead, he will juggle the company’s 2G and 3G clients while working toward major rollouts of HSPA+ and LTE technologies. Tekelec’s suite of products includes a session management solution for 4G rollouts, a subscriber data management solution, and a policy solution and performance intelligence center.
He said that 10% of the company will be culled as expenses and operations are scrutinized for further cuts. Tekelec recently laid off 50 employees at the North Carolina-based headquarters but continues to employ approximately 1,250 globally who service around 300 operators in 100 countries. De Lange said that almost 80% of company profits come from mobile operators with around 45% of the company’s business coming from the United States and the remainder worldwide. Major clients include Verizon Wireless, Vodafone Group plc, Telefonica and T-Mobile.
De Lange said that operators want to learn more about subscribers and control usage limits for data and video, which places a major emphasis on network intelligence solutions for Tekelec.
“We need to continue to build our market leadership in the software applications products and services for a mobile data and video control plane,” said de Lange. “We are focused on that share leadership by placing a large focus toward the tier-one mobile operators globally that are headed toward HSPA+ and LTE.”
De Lange said that policies toward users of high-bandwidth data services used to be simple, then led to bill shock requirements, followed by tiered service levels for users and now family data plans. The new CEO said all of the recent plans are becoming more sophisticated and putting more demand focused on intelligent networks.
In terms of defining success for the future of the company, de Lange said that Tekelec must change gears and foster growth.
“We’ll do that by continuing to build out our market share and our next-generation portfolio across key operators in HSPA+ and LTE rollouts,” said de Lange. “That footprint will define success for us.”
