Italtel

Italtel Ltd. (since 1981; formerly known by other names) is an Italian telecommunications equipment and ICT company founded in 1921, originally as a branch of Siemens AG. It played a major role in the development of telecommunication systems in Italy, most notably as one of the main equipment providers for the Italian state monopoly telephone operator SIP (later Telecom Italia) and as the leading actor in the evolution of the Italian PSTN from analog to digital switching (enabled by Italtel's CT, TN, and UT systems in the 1980s).[1] At its maximum prosperity, the company grew to over 30.000 employees.[2]

Italtel
TypeLimited company
IndustryTelecommunications
Founded1921
Headquarters
Milan, Rome, Palermo
,
Italy
Key people
  • Tiziano Onesti, Chairman
  • Stefano Pileri, CEO
  • Gerardo Benuzzi, COO
ProductsICT
€400m
Number of employees
1300
Websiteitaltel.com

In the 1980s-1990s, Italtel experienced a period of crisis and downsizing due to major changes in its reference market (including the abolishment of the state monopoly and the privatization of SIP/Telecom), a situation that was further exacerbated by an unsuccessful merger leveraged buyout at the beginning of the 2000s.[2][3]

The company then gradually repositioned itself as a player in the international ICT market, focusing on technologies such as IP networks, Next-generation networks, and VoIP,[4] and expanding its customer base to other telecommunication service providers (both national and abroad), public administration, and non-telco companies. In this process, Italtel established a partnership with Cisco Systems (becoming a Cisco Gold Certified Partner[5]) and opened offices in 25 countries worldwide, mostly in Europe and South America.[4][6] In the early 2000s, Italtel and Cisco played a leading role in another major evolution of the Italian telephone network, namely the creation of a national structure that allowed for most long-range telephone traffic to be transferred from the PSTN to an IP network (implemented by Italtel softswitches and Cisco media gateways).[7]

In 2013, Gartner Inc. has classified Italtel as a "visionary" player in the Magic Quadrant for Session border controller design, a title that is usually given to small companies that have a distinguished completeness of vision.[8]

History

1900-1940s: Company beginnings

The origins of Italtel trace back to the Società Italiana Siemens per Impianti Elettrici ("Siemens Italian Society for Electrical Plants"), the Italian branch of German Siemens AG, founded in Milan on 5 December 1898. After World War I, on 21 July 1921, the society changed to Siemens Società Anonima (Siemens S.A., "Siemens Anonymous Society"), with Giovanni Giamminola as the first CEO. Siemens S.A. is usually considered as the first incarnation of Italtel.[4][9]

By this time, the company was mainly operating as a commercial representative of Siemens for Italy.[9] This gradually changed in the late 1920s, when Siemens began to expand its manufacturing presence in Lombardy and Italy through the acquisition of small industries (most notably Officine Isaria Contatori Elettrici, an electricity meter producer) as well as the establishment of new ones, such as OLAP (Officine Lombarde Apparecchi di Precisione) which produced telephones, pneumatic tubes, radio receivers, and other electrical appliances.[10] In 1942, Isaria, OLAP and other small industries were merged with Siemens S.A. into Siemens Società per Azioni (Siemens S.p.A., "Siemens joint-stock company"), with over 3000 employees.

1948-1970s: Expansion during the economic boom
Telephone set "Bigrigio" (Siemens S62), 1960s
Telephone set "Grillo" (1974), a luxury model designed by Richard Sapper and Marco Zanuso

At the end of World War II, the German-owned Siemens S.p.A. was impounded to the Ministero del Tesoro (Department of the Treasury). Engineer Aganippo Brocchi, who was placed at the head of the company in 1948, managed to bring it back to its pre-war prosperity.[9][11] In 1950, the company was jointly acquired by SIP and STET, the financial services arm of the IRI (Istituto per la Ricostruzione Industriale, "Institute for Industrial Reconstruction") a public holding company established to support the survival and development of industrial assets in Italy.[9] During the "Italian economic miracle" (1950s-1960s) the leadership of Siemens S.p.A. chose to focus on the booming telecommunications market, and the company changed name to Società Italiana Telecomunicazioni Siemens (SIT-Siemens), with non-telco activities being transferred to the newly established Siemens Elettra.[9] In the same period, new production facilities were established in several places in Italy, including Santa Maria Capua Vetere in Campania (for the production of telephone devices), Settimo Milanese (near Milan), L'Aquila, Catania, and Carini (Palermo), and the company grew to about 30.000 employees.[2]

In the 1970s, during the so-called Years of Lead (an era of socio-political turmoil in Italy), Sit-Siemens was involved in several terrorist acts performed by the Red Brigades,[12] including their first kidnapping.[13]

1980s: Leadership of Marisa Bellisario

In the early 1980s, SIT-Siemens was the largest telco manufacturing company in Italy, but was also experiencing financial difficulties. In 1981, Marisa Bellisario, formerly head of Olivetti Corporation of America, was chosen as the new CEO.[14] Bellisario was an appreciated, self-made entrepreneur who also had strategic connections to the government (most notably Bettino Craxi, leader of the Italian Socialist Party and Italian Prime Minister in 1983-1987). She changed the name of the company to "Italtel" and actuated a thorough renovation process, which included replacing 70% of the management,[2] costs reduction, and downsizing,[15] and the establishment of several partnerships with other companies, including CIT-Alcatel, Siemens and Apple.[2] Under the leadership of Bellisario, Italtel produced the CT, TN, and UT digital telephone exchanges, which replaced analog with TDM digital switching, allowing for a radical evolution of the Italian PSTN. Italtel exchanges were installed all over Italy.[1][15] In the same years, Italtel changed from a single company to a corporate group, with Italtel S.p.A. as the leader of the group.[12][16] Bellisario and Craxi also envisioned merging Italtel with Telettra, another major Italian telco manufacturing company, to form "Telit", a corporation that would supposedly have the potential to face up with the largest telco companies worldwide; in 1988, anyway, Bellisario died, and the plan was never realized.[15]

1990s: Liberalization of the Italian telephone market

In 1989, with the sponsorship of Prime Minister Romano Prodi, STET signed for a joint venture between Italtel and AT&T, with 20% of Italtel being acquired by AT&T. This was the conclusion of a long negotiation process which also involved Alcatel, Siemens and Ericsson as potential alternatives to AT&T. The agreement between AT&T and Italtel included a non-compete clause whereby Italtel would maintain its leadership role in the Italian telephone exchange market.[17][18]

In the early 1990s, the state monopoly on telephony was abolished, and the state-owned operator SIP was turned into a private company, Telecom Italia.[19] At the same time, as a consequence of the privatization of SIP/Telecom, Italtel lost its position as SIP's privileged equipment provider; the alliance between Italtel and AT&T proved to be unsuccessful for both partners, and was canceled in 1994.[19] In 1995, STET initiated a joint venture with Siemens for the control of Italtel through a newly funded company called "Telsi". In this process, Siemens Telecomunicazioni was merged into Italtel.[19] In the late 1990s, Italtel ceded to Siemens all its radio and mobile-related activities, and in turn Siemens sold its 50% share of Telsi to Telecom Italia, which thus ended up owning, either directly or indirectly, 100% if Italtel.[2] All these events severely weakened Italtel, which went through another major restructuring and downsizing process. The company shifted its core business towards voice over IP and network convergence technologies, and was forced to look for new customers, including so-called OLOs (Other Local Operators), foreign markets, public administration, and enterprises.[2] Its number of employees fell to under 20.000.

Italtel today

After this, in 1999, Italtel Tecnoelettrica (projectation, production and selling of circuits for telecommunications, computers and automation) is given to Lares Cozzi. The multimedia activities (research, production and fixing of decoders for Stream TV and telephones, maintenance and fixing of the commutation centrals in the structure of Santa Maria Capua Vetere) are sold to Finmek-Access Media; Italtel Systems (project, maintenance and installation of telecommunications systems for Italtel) is sold to a group of companies guided by Tecneudosia. Workers become a little more than 3200.

Italtel proceeds to acquisitions linked to IP networks and multimedia services. These purchases include societies as One Ans for informatics advice and Securmatics for informatics security. From 1999 the products offering concerns telephony on IP base with the i-SSW product, at first implemented on a proprietary hardware and on ATCA standard. When the partnership ends in 1999, Italtel S.p.a. passes at 100% to Telecom Italia, which in 2000 gives the mayor part to Clayton, Dubilier & Rice and Cisco Systems.

In 2000, Italtel transfers a big part of the voice traffic of the operators on IP network. In 2016 Italtel projects, develops and realizes products and other solutions for networks and telecommunication services of new generation.

Products

Notable products include:

  • Siemens S62 (1962): also known as Bigrigio ("Bi-grey", as it originally came in two different shades of grey), S62 was the first desk telephone set to be distributed nationwide by SIP as the default handset for its subscribers. It became the most common set in Italy across the 1960s-1980s.[20]
  • Grillo (1960s): a luxury telephone set designed by Marco Zanuso and Richard Sapper, winner of the Compasso d'Oro award for design in 1967.[21]

Current products include:

Locations

Italtel's headquarter is in Castelletto di Settimo Milanese, near Milan. Other Italian offices are located in Rome, Carini (near Palermo) and Marghera (near Venice). Italtel also works in Europe, Latin America and North America, where a new office in Miami (Florida) opened in 2016.

References
  1. C. Mossotto, L'evoluzione della commutazione
  2. M. Cuzzetta, La crisi e il risanamento di impresa: il caso di Italtel
  3. «Repubblica», Più aziende e meno telco nel futuro di Italtel
  4. «Repubblica», Italtel festeggia i novantanni di industria
  5. Cisco official site, Partner locator
  6. Italtel official site, "Where We Are"
  7. Telecom Italia, Il Decommissioning della rete e dei servizi PSTN/ISDN
  8. «PR Newswire», Italtel positioned in the "visionaries" quadrant for session border controllers
  9. Lombardia Beni Culturali, Italtel SpA (company history)
  10. Siemens official site, History of Siemens in Italy
  11. «L'Arena di Pola» nr. 1229 (21 June 1960), Ingegner Brocchi, presidente della STIPEL
  12. Sistema Informativo Unificato per le Soprintendenze Archivistiche, Italtel
  13. R. Lumley, States of Emergency: Cultures of Revolt in Italy from 1968 to 1978, (London: Verso, 1990) p.282.
  14. Treccani, L'imprenditoria femminile nell'Italia Unita
  15. «Corriere.it», Milano e un sogno chiamato Italtel
  16. "ISEC (Istituto per la Storia dell'Età Contemporanea), Fondo archivio storico Italtel" (PDF). Archived from the original (PDF) on 18 September 2016. Retrieved 8 July 2016.
  17. «Repubblica», Italtel-AT&T: c'è la firma
  18. «Los Angeles Times», AT&T and Italtel Sign Broad Pact
  19. Franco Russolillo, Storia dell'IRI
  20. Museo Nazionale Scienza e Tecnologia Leonardo da Vinci, Telefono automatico a batteria centrale (BCA) S62
  21. SAN (Sistema Archivistico Nazionale), Italtel, Telefono Grillo, disegno tecnico, 1974
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