Avaya Hopes World Cup Exposure Helps It Score Customers

20 Jun 2002
When the U.S. soccer team faces three-time World Cup champion Germany in Seoul Friday, the players won't be the only Americans with fortunes riding on their performance.

Telecommunications equipment maker Avaya Inc. (AV) is using the world's most watched sporting event as a global stage, taking a highly visible sponsorship that includes the construction and management of a 3,100-mile fiber-optic communication network, which is being used by those working at the World Cup. If things work out well, Avaya will use its new name recognition and network performance as a way to score contracts with companies around the world.

"We did this with an international perspective in mind, looking for something that would let us reach a lot of countries at the same time," said Don Peterson, Avaya chairman and chief executive. "We do get the same (on-field) signage every other sponsor gets, but our role is a lot more than shipping in some boxes of material. We've had people on the ground for four months building the network and testing it."

The network, which is handling an average of 100,000 calls a day, was built on the fly, so to speak, and is operating, Peterson said, at levels similar to the highly reliable networks owned by America's Baby Bells.

"It's probably the biggest converged network in operation this month," Peterson said. "While it's up, it's handling more traffic than most corporate networks. It's proving itself, very, very well, and that's the story we will take to our customers."

Avaya, a spinoff from Lucent Technologies Inc. (LU), estimates its sponsorship and in-kind services in connection with the 2002 World Cup, 2003 Women's World Cup in China and 2006 World Cup in Germany will cost about $100 million.

The company, which derives about 25% of its sales from international customers, hopes the investment will reap large rewards in the global market, worth about twice that of the U.S. market annually.

"We're already finding our affiliation with the games has piqued curiosity," Peterson said. "Somewhere between 12,000 and 13,000 journalists are using the network to write their stories and (transmit) photos. We're building a lot of goodwill that we will capitalize on going forward."

Avaya built and is maintaining two networks that connect the athletes, media, game volunteers and corporations in both Korea and Japan, where the matches are taking place in 20 stadiums, to the remainder of the world.

The World Cup will be viewed by billions around the globe, and most will see the name Avaya on signs lining the field or on tagline television advertisements that broadcasters run near the match score.

Peterson noted that Avaya is one of 15 cup sponsors, but one of only two technology company sponsors.

"There hasn't been a sponsorship like this with (the Federation Internationale de Football Association)," he said, referring to the governing body of the World Cup. "We are the first to do something of this type.