What’s the buzz?

LAS VEGAS – It’s shoooow time! This issue of MRT is also being circulated around the IWCE show floor to the thousands of folks who have come to learn about the opportunities and challenges in our industry. They’re here to view the rows and rows of exhibits, to witness the dialogue between the regulators and the regulated . and to be found drunk under a roulette table with a showgirl named Mimi LaFlame (those feathers tickle).

Every year, local operators, public safety folks, regional paging companies and a host of others descend on Las Vegas for IWCE to pick up on the happenings and rumblings among their cohorts in communications. They swap tips, lies, stories and jokes while trying to calculate how well they are doing compared to some other guy’s business located on the other side of the country.

And, they listen.

So, what’s the buzz this year? What’s new and what’s still the same? Where are we heading, and where will we be when we get there? All of the gurus will be here with cracked crystal balls and used tea leaves to give predictions and to pontificate on the future of the industry. And I, your humble columnist, will be among them. I’m dishing out advice-wanted and unwanted-and ideas about how to keep what you have and to get more of what you want.

The buzz this year is business. Not equipment, not performance, not propagation, not rules, regulations or policy. This year we are getting down to business about business. The old days of attendees only talking about throughput, guy anchors, fried PAs, lightning strikes and the mundane but important aspects of installation techniques is giving ground to new conversations. The phrase “multiples of cash flow” and the calculations that flow from it will be discussed many times more than voltage standing wave ratios will be.

Now, I know that hoards of techs are attending the technology sessions, gleaning the newest information about equipment and RF design. And, I know that the public safety guys will be treated to a track designed specifically for those spectrum-rich/budget-poor servants from local governments across the nation.

But the rest of us will be talking about making money.

As the sophistication of the local operators has increased, and the competition has become more intense, the industry has winnowed out the hobbyist, the ham-turned-local-operator and the feint of finance. Local paging operators spit out RPU numbers like they were drafting a 10Q for an SEC filing. SMR operators are talking about multiples of cash flow, capital gains and the cost of money to finance relocation vs. the sale of channels.

Tower operators are calculating the ROI of tower building vs. tower purchase vs. tower sale and are following the path of most profitability, employing terms that more often are used by investment bankers rather than dispatch operators. People are talking about “markets” rather than customers. It’s the language of business.

To be sure, the industry still has its Reubens. Although the entire industry is gaining momentum rapidly, there will always be those that lag behind. And for all of the talk about capital gains and reinvestment, a local operator who doesn’t know how to construct and operate a system will always be at a disadvantage. The practicality of operation will always be a priority. We are all still creatures of RF design.

But in bygone years, operators would sit around the bar and talk primarily about product performance in terms of RF efficiency. Now, operators are adding a new and quickly spreading subject to their conversations: a focus on RF efficiency translated into profitability.

So, what’s the buzz? The buzz is the business education of the local operator. It’s a combination of The Wharton School of hard knocks, tough lessons learned and new ideas about how to get the most dollars out of an increasingly competitive marketplace.

For example, when a local operator sells air time to a school bus operator, he is now more likely to calculate the effect on churn, earnings, and market penetration than he is to consider the cost of the mounting hardware. He may employ industry multiples on cash flow for determining the value of the contract. He may characterize the deal as “positioning” rather than simply as customer service. He may leverage the deal with a concurrent tower lease agreement, raising his cash flow for both active and reactive purposes to augment the overall value of his business and its assets. And, he may provide a far greater incentive for the saleswoman who created and closed the deal than for the supervising technician who will install the system.

When he makes money, the local operator is more likely to consider whether profits are better applied to expansion, enhancement, personnel, sales, marketing, or outside investment based on an expected earnings calculation prepared by a CPA. I’m getting numerous calls from clients who are focusing on valuations of assets and potential investment in expansion. It used to be that they just wanted to know why frequency coordinators make all the money.

If you run into me, I will speak to you about doing an audit on your business (and this activity is a must for Mimi LaFlame). Not the kind of audit that a CPA does, but one that involves breaking down your business into titles, assets, contracts, and licenses to determine status and direction for future actions. Or, at least, we’ll talk about an approach that will work for you in setting up ongoing evaluation criteria for taking litmus tests on reasonable revenue expectations.

So, what should you do to make sure you get the most out of IWCE? First, talk to me if you’ve got a new joke-or if you’re dating Mimi’s sister. Second, ask the right questions, then listen. The right question relates all aspects of operation and equipment purchase to either long-term or short-term revenue potential. When speaking with vendors, find out how their products and services will translate into market growth or higher revenues. Forget the bells and whistles-unless every time the box beeps, it means money.

Oh, yeah-drop in on the opening session. I’m giving the keynote address, and maybe I’ll be able to answer a few of your questions. Or, maybe I’ll just make you laugh and leave the hard stuff to the other guys. After all, everything I know about spreadsheets I learned from a chambermaid.