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Tuesday, Jun 25, 2024

Telecom in a Local Growth Spurt

Any talk about telecom in San Diego conjures up visions of new, more powerful cell phones rolling off the assembly line.

But the reality is, the industry here is focused on designing and developing, much less on manufacturing.

“Eighty percent of our membership has less than 50 employees, which means they’re young, they’re start-ups, they’re entrepreneurs, and they’re mostly doing wireless technology,” said Julia Wilson, chief executive officer for the San Diego Telecom Council.

That doesn’t mean the area is bereft of any company actually making real products. Kyocera Wireless, which acquired Qualcomm Inc.’s cell phone manufacturing unit in 1999, still makes cell phones here, but is moving most of this business south to its Tijuana maquiladora.

More indicative of San Diego’s telecom industry is a firm like IP3 Networks, which moved into new, larger headquarters in Sorrento Valley late last year.

The company makes communications equipment that allows computer networks to be accessed by temporary users. Founded some three years ago, its employment more than doubled last year to 28, and CEO Mike Lee expects that number to grow to about 40 by the end of this year.

Sales of the company’s product reached more than $2 million last year, but should surpass $8 million this year, Lee said.

As clear evidence that IP3 Networks is onto something, it captured second round funding of $5 million from Silicon Valley-based Sequoia Capital. It’s the same VC firm that invested in Google, Yahoo, and Cisco Systems.

Growing Numbers

Wilson said a 2-year-old survey of the local industry found about 300 directly related telecoms operating here, but the estimated number today is likely closer to 500, including many companies that have some telecom operations but aren’t usually identified within the space.

The same survey estimated San Diego’s total telecom employment at 39,000.

Many of the largest telecom employers operate research and development divisions here, including Ericcson Wireless Communications Inc., LG Infocom, Motorola Inc., and Nokia Mobile Phones, Inc.

“They come here for the CDMA (code division multiple access) technology that was developed here,” Wilson said. “Each of these firms are doing research in CDMA, and it makes sense to come here.”

While it’s unfortunately true that global competition has resulted in the loss of some manufacturing jobs, such as those at Kyocera Wireless, the industry is apparently creating plenty of higher paying positions.

“Qualcomm alone has about 1,000 openings, and most of these jobs are senior engineers,” she said.

Wilson estimated total vacancies of all telecom companies to be about 2,000.

As many of the area’s start-ups get to a certain size, they attract attention of much larger companies that acquire them, and then pump additional capital into the companies to help them grow faster, Wilson said.

Two recent examples are Widcomm Inc. and Zyray Wireless, both of which were acquired by Broadcom, a publicly traded maker of communication chips based in Irvine.

Lots To Do

With the new year well under way, the Telecom Council has already attended one major trade show in Cannes, France, and has plans to participate in three others. In addition to marketing the local telecom industry both nationally and internationally, the council also puts on seminars to allow companies to network with each other, and learn more about what each of them does, Wilson said.

This year, the council hopes it can do a better job in two areas: helping firms secure venture investment, and helping them to get into new markets.

The council recently relocated its office from Sorrento Valley to University Towne Centre at 4350 La Jolla Village Drive.


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