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Mind Share
October 2004


Marc Robins

AT&T? Don’t Bet Against Them!

BY MARC ROBINS


The hats keep flying into the consumer broadband telephony ring, as more service providers make announcements of new service offerings, such as Verizon and its new Voicewing service, and the new “incumbents” (Vonage and AT&T) parry with new co-marketing agreements and distribution partnerships with retail and e-commerce companies in the hopes of expanding their customer base and market share.

Indeed, no company, it seems, has been trying harder than AT&T to assume a dominant position in the market and to make their service as widely and conveniently available to as many consumers as possible. In the last few weeks, we’ve been inundated with news releases from AT&T, the company that recently spent $22 million on a nationwide advertising blitz during the Athens Olympic Games to promote their CallVantage broadband telephony service to prospective customers in the 170 markets where it now offers the service.

So far, AT&T has inked co-marketing and distribution deals with CableLabs, Adelphia Communications, Amazon.com, and Best Buy. The CableLabs agreement gives AT&T access to Go2Broadband, an Internet-based e-commerce tool that will allow AT&T to help bandwidth-deprived customers wanting to sign up for CallVantage Service with a broadband solution in certain areas served by CableLabs’ cable system operator members. AT&T will be able to take orders for cable modem service, and simultaneously sign them up for CallVantage service.

The Adelphia deal is similar in nature, in that Adelphia will serve as AT&T’s preferred broadband solution for customers wishing to sign up for AT&T CallVantage Service in areas served by the cable operator. With Amazon.com, AT&T is using the e-commerce titan as the prime launching pad for their “e-tail” strategy, whereby Amazon.com customers can find AT&T CallVantage in the Electronics Store at Amazon.com by searching for VoIP or CallVantage. I expect to hear about many more such deals in the months to come.

AT&T has also been quite busy on the enterprise services front, and has recently introduced a new integrated services offering called IP Telephony LAN Services. This offering is designed to provide enterprise customers looking to migrate to an IP telephony infrastructure with a choice of new IP-PBXs from companies such as Avaya, Cisco, Nortel Networks, and Siemens. AT&T also plans to provide and support the associated local- and wide-area networking equipment, as well as a host of IP-based managed network services. In short, AT&T wants to act as a reseller and systems integrator, and serve as a one-stop-shop for IP telephony equipment and the IP transport services behind it.

As AT&T sees it, their mission is to enable businesses to run voice over data networks with IP local and PSTN hop off, ensure interoperability with the leading IP PBX equipment vendors, and then help deliver key VoIP applications, including IP Centrex, Teleworker, and audio and video conferencing and collaboration.

For companies that are just starting to consider VoIP and IP telephony, but have not yet created the business and/or technical justification for it, LAN Services hopes to deliver technical and cost models justifying future directions, leveraging teams that specialize in technology and ROI assessment.

For companies that are ready to move to IP telephony and an IP-enabled contact center infrastructure, AT&T wants to come in and design and implement the network and contact center infrastructure. If you’re already deployed IP telephony in a portion of your corporate or contact center environment, AT&T plans on helping you leverage the existing implementation to build a compete end-to-end solution.

And finally, for companies that have done all the above, but are growing weary of managing and maintaining the infrastructure, AT&T proposes that you outsource those functions to their experts.

Success is certainly not guaranteed for the veteran telephony company, but AT&T does have a number of things going for it that will help it to at least establish major beachheads in the consumer and enterprise markets. For one, the company has spent billions of dollars IP-enabling its network, and AT&T runs a substantial portion of the Internet backbone. Its expertise in IP networking is unrivaled, and its brand power is still enviable. And although its longtime lock on the consumer market for long-distance services has been shaved to less than half over the last several years, the company has millions of still loyal customers. AT&T might be down, but I certainly wouldn’t count it out.

Marc Robins has been involved in the telecommunications industry as a researcher and analyst, author and publisher, and marketing executive and consultant for more than 23 years. Marc served for five years as vice president of publications and trade shows and group editorial director at TMC. Robins Consulting Group offers an array of professional services to the IP telephony industry. Contact RCG at 718-548-7245 or robinsconsult@optonline.net.

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