Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, February 6, 1994 TAG: 9402020267
SECTION: BUSINESS PAGE: F-1 EDITION: METRO
SOURCE: LON WAGNER STAFF WRITER
DATELINE: LENGTH: Long
Tele-Path's resurgence has been as a troubleshooter in the conversion from analog to digital data transmission. Its short history shows how quickly a company can rise if it rides the emergence of new technologies.
Electronics manufacturer Joel Ewen founded Tele-Path in 1972 and tried to\ make a name setting up telephone networks for small offices.
In 1979, a Massachusetts company bought Tele-Path. Sippican Corp. then saw\ Tele-Path as its means of getting into the growing telephone services business.\ But by 1983, Sippican had fallen flat.
"It was in so much trouble that they were trying to sell it for just the\ value of some inventory they had accumulated," says Tele-Path President Leon\ Harris.
So Harris, then working on the engineering side of General Electric Co. in\ Waynesboro, his wife, Beverly, and Dr. Kenneth Bowman and his wife, Nancy,\ bought Tele-Path.
They shifted its focus, from analog phone systems to electronic data\ transmission. The company's sales hit $4 million in 1989, and last year broke\ the $10 million mark. Its 19-person work force grew to 55, and its Melrose\ Avenue building is bursting at the rivets. Tele-Path is constructing a\ 20,000-square-foot building in Salem's new industrial park on Apperson Drive.\ The company hopes to move there in June.
What's responsible for the turnaround? The company's managers foresaw the surge in data-transmission devices - fax machines, computer modems, automatic teller machines. They knew that as new technology emerges, so do glitches. And they concentrated on making equipment to ferret out those problems.
The Roanoke company relies on the expanding regional Bell phone companies\ for 75 percent of its business - and MCI, AT&T and the like are among its other customers. Ameritech, a regional Bell company based in Chicago, last year named Tele-Path its vendor of the year.
Tele-Path Industries' business is mirroring the 25 percent yearly growth in\ the telecommunications industry, Harris says.
"We're involved in the side of data testing and telecommunications that's\ growing quite rapidly," Harris says with a smile, "so we're having fun."
When Tele-Path bought out Sippican, it phased out the Massachusetts\ company's unprofitable products. That left them just one saleable product, a\ device that tested digital data transmission.
Tele-Path Industries now has 10 product lines, any one of which will sell,\ at most, 50 units a month. The testing equipment costs a minimum of $3,000 apiece.
Tele-Path sells portable testing equipment for something called integrated\ services digital networks. If a customer is having phone problems in his or\ her house, for instance, Tele-Path can hook one of its monitors into the phone\ lines and "look back toward the network" to isolate the difficulty, Harris\ said.
By specializing in a few areas, Tele-Path Industries has quietly been\ battling industry giants, including Hewlett-Packard Co., Tektronix Inc. and\ others.
To Hewlett-Packard, which sold $16.4 billion in an array of electronics\ equipment in 1992, Tele-Path is a "niche" company. Mary Fallon, a spokeswoman\ for the Palo Alto, Calif., company, says Hewlett-Packard in recent years has\ seen "the rise of an awful lot of niche players, some of them quite nimble."
Harris knows Tele-Path will have to be nimble to survive.
"New products are the lifeblood of what we're doing," Harris says. "I look\ at our products and the life cycle - everything we have has to be redesigned\ in three years or it's out of date."
To constantly improve its products, Tele-Path employs about 15 engineers -\ from colleges such as Purdue University, the University of Washington, Louisiana State, North Carolina State, West Virginia University and Virginia Tech. More than half of Tele-Path's engineering time is spent creating computer software to run the company's test equipment.
Those engineers work hand in hand with those who repair and test the\ equipment.
"I tell you, it's nice to work at a small company like this," Kirk Robison,\ a five-year employee, says. "If I need to know something, I just walk over to\ the engineer and ask him."
Robison says Tele-Path has a 10-day turnaround on repair, something the\ company claims gives it an advantage over other testing equipment suppliers.
"You can talk to the person who designed it," newly hired Chris Robertson\ says of malfunctioning equipment, "instead of just a person who worked on it a\ couple of times and turned it on."
The monitors made by Tele-Path and similar companies are becoming more\ crucial as the country's data transmission lines become more and more crowded.\ Right now, the technology to send data is faster than the lines that carry it.
Most fax machines, for instance, transmit data at 2,400 bits of information\ per second. The industry standard in data technology is already 1,544,000 bits\ per second, but the analog network can't handle transmissions that fast.
"We're bringing in the ability to run a fax machine at 64,000 [bits per\ second]," Harris says. "As you look at how faxes have changed our lives in the\ past five or six years, I think it's going to change them that much more."
Harris explains that Roanoke and a lot of other cities are known as\ "islands" in communications links. In other words, Roanoke and Richmond have\ switches capable of sending information digitally, but there's not a digital\ path between them - the switches can't talk to each other.
Tele-Path is involved in testing such transmissions.
"It's an opportunity on one hand," Harris says, "but if you don't do it,\ you're not going to be here."
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