Williams’ new branding, which encompasses all of its businesses, is displayed on a Communications Solutions service van in Atlanta. This business serves 133,000 sites in North America.

Communications Solutions in 1997 more than doubled year-over-year revenues and nearly tripled operating profit. Through major acquisitions including the distribution channel of Nortel, the unit virtually doubled in size, becoming the largest independent distributor and integrator of business communications
solutions in the industry, with more than 120 sales and service offices and more than 6,000 employees.

Key Points
*In April 1997, Williams and Nortel agreed to combine their voice business communications equipment and service-based units. Williams owns 70 percent of the combined entity. This combined business contributed more than $1.2 billion in revenues in 1997.

*We combined several independent businesses acquired in 1996 to form a network systems integration group, solidly establishing Communications Solutions as a provider of both voice and data products and services. This move is important because of the convergence of the voice and data markets, bolstered by steady growth on the voice side and exploding demand on the data side. We expect the network systems integration segment of our business to be a major growth area in 1998.

*We continued to expand the network monitoring and management capabilities of our National Technical Resource Center in Houston. This leading-edge facility is the cornerstone of our extraordinary service, enabling us to take responsibility for customers’ networks literally around the clock.

*We established a group of advanced applications developers and integrators to capture opportunities in the call-center business, which is a rapidly growing segment of the communications industry. This value-added, high-margin segment should provide additional operating profit in 1998.

Outlook
Communications Solutions positioned itself in 1997 as a premier provider of voice solutions and a formidable player in emerging markets such as data, call centers and outsourcing. As the business communications market continues to evolve, we are ideally positioned to serve the convergence of the voice and data markets.

The voice market is expected to continue growing annually at a 7 to 9 percent rate over the next three years, while the data and call-center markets are expected to grow annually at 16 to 25 percent. We will continue to focus on capturing additional market share in all these areas while investing in asset capabilities that allow us to capture future growth. Estimated 1998 capital expenditures in this business unit are $58 million, primarily for systems and equipment.

We expect Communications Solutions to grow faster than the traditional voice market and significantly improve its operating profit in 1998.