Changing times benefit York Telecom
By SHERRY CONOHAN
Staff Writer

EATONTOWN — Fueled by a slowing economy and the fear of flying, business at York Telecom Corp., a provider of teleconferencing systems, has taken off and the company expects it to grow by nearly half in 2002.

The firm, located on Corbett Way off Industrial Way West, packages and services teleconferencing systems for businesses, government and the home.

Founded in 1985 by York Wang, an alumnus of Bell Labs and one of York Telecom’s two presidents — the other is Ron Gaboury — the company moved in October from its former longtime home farther down Industrial Way to its present building, which has high ceilings and twice the space.

Dean Gonteski, vice president of solutions for York Telecom, said the larger, 33,000-square-foot headquarters has enabled the company to beef up its help desk and increase staff in both sales and product management.

"Moving here was a great opportunity," he said.

Gonteski said the company was compelled to move with the expansion of the business. He said the revenues of the privately held firm grew from $18 million in 2000 to $22 million to $23 million in 2001.

"We’re looking to do, conservatively, about $32 million [in business] this year," he added.

The reasons for the boom? There are two, Gonteski said.

The first, he said, was the downturn in the economy.

"Our industry is very predictable," he said. "It’s predictable in terms of, if the economy starts to dip down, our business starts to increase.

"We’re not recession-proof," he said, "but as travel budgets get cut, people are looking for alternate modes of travel and training. It’s ‘How do I reach a number of people without bringing them all in, because I don’t have the dollars to do that?’ We started to see that trend back in June."

Then, he said, along came the tragic terrorist attacks of Sept. 11 and the cultural change they wrought.

"People are afraid to travel," he said. "They want to look at alternative ways to get education, to see family members, to do business. And all these things that they’re looking at is where visual communications, as we term it — video conferencing, interactive video, streaming video, video on demand applications, custom applications — come into play."

Gonteski said the cultural change affects the whole spectrum of society, from Fortune 500 companies down to the consumer.

"And now people are saying it’s not ‘I’d like to have this, I want to have this,’ it’s ‘I need to have this,’ " he said about video communications. "Our inquiries since then, on the commercial side, have increased tenfold. On the federal side of the business, the government has done this for many years."

Gonteski said 70 percent of York Telecom’s business is with the federal government; the remaining 30 percent is with a variety of other customers.

York Telecom’s largest customer is the Social Security Administration, which has 1,500 sites with teleconferencing equipment in place, he said.

Gonteski said the Social Security Administration decided it had to serve the customer better so it issued a mandate to build the nationwide network.

"What they were doing is, when a new rule came out for Social Security, it was taking them in some cases, in remote areas, close to a year to get people trained on the new rule, and by the time they were trained on that one, a new rule was coming out," he said. "So by doing this, they cut their training time to within 30 days. So going from nine months to a year down to 30 days to get all their agents trained is a huge initiative. They’ve won awards for it."

Gonteski said NASA is another of York Telecom’s many federal customers, but there are others that he can’t talk about for security reasons.

Customers in the private sector range from Tiffany & Co., to Lehman Brothers, Ernst & Young and the University of Medicine and Dentistry of New Jersey, he said.

Gonteski said the company is now going global through partnerships around the world in the Visual Communications Worldwide Alliance. He said the alliance is now active in the United Kingdom, Switzerland, Singapore and Australia. South Africa, India and South America will be added soon, he said.

Gonteski said while York Telecom began as a service company working with AT&T, it has graduated into building and installing systems as well, and handling the billing for wire connections. He said York will buy the parts from Sony or other like companies, and then integrate them and make a "wrap."

"Sometimes we do it in this building," he said. "Sometimes we ship all the parts out and we build it on site from scratch. It’s a lot of fun."

The equipment that York makes available ranges from a high-end module with a 32-inch television screen, an elaborate video eye and remote control, and such amenities as a built-in connector to make multipoint calls and the ability to share documents, which can be pulled up from one site to another and changed. Such a system will sell for $18,000 to $20,000. A more scaled down model can be had for $10,000 to $12,000, according to Gonteski.

"But prices are dropping," he said. "Some are going down to the $5,000 – $6,000 range.

"In this industry, you get what you pay for," he added.

For the home user, there’s the smaller PC with a round eyeball for a camera.

Gonteski said the home unit costs around $1,000 a month, but every effort is being made to get that down to $300 to $500 a month.

"If you have a small business operating out of the home, that becomes reasonable," he said.