Welcome to Endeavoring!

The signs of the fall season are upon us: leaves are changing color, temperatures are beginning to drop, and Endeavor staffers are beginning to pull out their coats and scarves from the attic. You know what that means…the holidays are almost here!

Another sign that tells us the holidays are almost here is the annual dip in volume that is expected as part of the business cycle in the telecom industry. As businesses in many industries such as retail, hospitality, and food service prepare for the peak months during November and December, many choose to delay installation deployments or put them on hold until the New Year. The spotlight article featured in this month's issue provides more insight into this annual business cycle and also presents a higher level view of the telecommunications industry and Endeavor's position within that market.

Also, we wanted to wish our loyal Endeavoring readers a Happy Halloween! Once again, the Endeavor team is celebrating with its annual costume contest and smorgasbord of sweet treats for the staff. Expect pictures in next month's edition!

Until next time!

Your Team at Endeavor Telecom
editor@endeavortelecom.com

As we approach the holiday months to close out 2009, Endeavor staffers and technicians may notice a small dip in order volume, which has to do with the typical business cycle involved in the telecommunications industry and, more specifically, Endeavor's position within the industry as the leading provider of outsourced professional services. The editorial staff decided to dedicate this month's spotlight to providing our readers insight into not only the annual business cycle but also the overall outlook forecasted in the telecommunications industry.

Many of Endeavor's commercial clients are concentrated in the retail and hospitality verticals for enterprise clients or sell into the small to medium business (SMB) segment. Retail end-users obviously do not like to have the networks and equipment which run their credit card and point-of-sale systems disrupted during peak shopping season, and hotels and restaurants have similar concerns during holiday travel. These hospitality and retail industries usually choose to postpone large installation deployments until after their holiday seasons. Each year, there is an expected decrease in installation volume that coincides with the back-to-school sales of September and really kicks in as retailers prepare for holiday shopping from late October and through the end of December. The black-out periods within retail and hospitality coupled with the normal vacations and holiday distractions within SMBs create a seasonal lull in Endeavor's commercial work. The vast majority of Endeavor's growth over 2009 has been in the commercial space, so residential dispatches are a much lower percentage of overall business. The result is a more pronounced seasonal impact in business with October through December being noticeably slower and March through August being substantially busier.

The annual business cycle for commercial installation deployments picks up again in January and continues through February and March. April typically marks a surge in volume as Endeavor's customers begin deployments with End-Users they signed on at the beginning of the year. Then, as the summer goes on, things kick into high gear until we find ourselves back in September when that dip begins yet again.

So that gives you a good idea of how a typical year works in regards to the business cycle, but what about the telecom industry from a higher view? Where is it heading, and what we can we expect? Well, thanks to a study published by The Telecommunications Industry Association (TIA) earlier this year we have a pretty good idea. According to the statistics published by TIA, the telecommunications industry is an estimated $1 trillion market which is expected to grow 4.3% through 2012.

Where does Endeavor fit into this larger industry landscape, you ask? Within the grand scheme of things, Endeavor's primary presence in the telecom world resides within the Support Services category which, according to TIA includes maintenance and repair, integration and installation, as well as logistics and technical support. This Support Services sector represents an estimated $434.2 million of the total revenue and consists of three primary segments: wireless support, enterprise network and CPE services, and finally wireline, cable, and broadband support services.

Spending on wireless technology has grown steadily since 2003, increasing by 7.3% between 2007 and 2008. Endeavor has experienced this firsthand, as more and more customers are utilizing wireless technologies in large scale deployments, leading the company to invest heavily in wireless test equipment and training to ensure the field technicians were prepared for the emerging demand. TIA projects a slight decline in wireless over the next two years followed by double-digit gains in 2011 and 2012 for an estimated 6.4% net increase from 2009 to 2012.

Similar trends are forecasted for wireline, cable, and broadband support services, which had an annual revenue of $65.3 million in 2008. It is anticipated that as companies work to reduce costs by cutting down spending on equipment, they will also cut the amount invested in support services, leading forecasts to predict declines through 2010 followed by increases in 2011 and 2012.

The market for enterprise support consists of services related to enterprise network systems and customer premise equipment. Enterprise networks are those in the process of converging, combining telephone and data equipment such as phone systems, conferencing systems, and other related equipment. Revenue for such converged networks is expected to increase, as more support and expertise is required to design and maintain these types of networks. This bodes well for Endeavor, whose technicians are experts in CPE/network installs and are widely experienced in integrating a variety of specialized equipment i.e. digital signage, point-of-sales, and IP enabled security applications.

In regard to timing, Endeavor generally sees an immediate increase in business as customers shed fixed expenses in response to a down economy. On the upside, increased available capital for major IT deployments (like we are seeing now) is a leading indicator for demand to come in helping Endeavor forecast its business two plus quarters in advance of actual volume as Endeavor's customers' average an enterprise end-user sales cycle of between six to nine months.

Overall, Endeavor is positioned very well within the larger telecommunications industry in that, despite the ups and down of the economy and its impact on the telecom world, the company is continually growing. Whether expanding its customer base to include companies specializing in non-traditional telecommunications products in growing industries such as point of sales or digital signage, or by instituting programs to increase cost savings and improve efficiency for customers, Endeavor will continue to remain the leading provider of outsourced professional services for the foreseeable future.

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