SBC Merger Wont Derail AT&Ts Plans

By John Pallatto  |  Posted 2005-03-09

SBC Merger Wont Derail AT&Ts Plans

SAN JOSE, Calif.—The proposed merger with SBC Communications Inc. wont derail AT&T Corp.s plans to aggressively develop its SOIP (services over IP) strategy, according to AT&T executives who spoke at the VON Spring 2005 conference here.

"There is going to be much more investment beyond what has already been announced individually by the two companies," said Behzad Nadji, vice president of AT&T Labs Research in Menlo Park, Calif.

AT&T is not content to just offer a VOIP (voice over IP) telephone service.

Its going to offer a broad range of IP-based services that go beyond the CallVantage VOIP telephone service that the company introduced in 2004, Nadji said.

These services will include conference, messaging, work collaboration, video and IP Centrex services designed to serve different market segments from residential consumers to small businesses and large enterprises, he said.

The combination will have the infrastructure that is capable of servicing millions of subscribers across all of these market segments, he said.

It will be able to provide service levels and quality of service that will exceed smaller telecommunications companies or the many VOIP startups, Nadji said.

"The combination of AT&T and SBC would have the necessary tools to manage a large number of people and customers," he said.

SBC announced Jan. 31 that it had reached an agreement to buy AT&T for $16 billion.

The buyout is currently under regulatory review and has to be approved by the Securities and Exchange Commission before SBC can close the deal.

Click here to read David Courseys opinion on why SBC should become AT&T—not the other way around.

Nadji noted that AT&T already has all the infrastructure it needs to expand its IP services, including the network functions, call control, electronic 911, and peering.

AT&Ts long-established network handles PSTN (Public Switched Telephone Network), cellular calls and Wi-Fi communications as different access methods that can be accommodated by the same network.

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This will give the SBC-AT&T combination an advantage in providing diverse services and dealing with a large number of customers.

He also noted that AT&T also had the proven "operational discipline and capability" to manage millions of subscribers.

Prior experience has shown that smaller telecommunications startups tend to have quality-of-service problems once they start serving more than 1 million subscribers, he said.

Click here to read the details about America Online Inc.s plans to offer VOIP phone services.

With these plans and its infrastructure in place, AT&T is serving notice that it doesnt plan to stand idly on the sidelines as a clutch of new and existing telecommunications companies that are getting into the VOIP market.

For example, AOL officials revealed Tuesday that it was it was starting a VOIP service integrated with its AOL Instant Messenger console and based on PSTN network services and switching provided by partners Level 3 Communications Inc. and Sonus Networks Inc.

Vonage Holdings Corp. announced on Monday that it had become the first VOIP service provider to activate more than 500,000 broadband VOIP lines.

AT&T is also in a position to offer enhanced IP services for enterprises and small businesses that go beyond the residential or consumer voice services that other VOIP services offer.

For example, AT&T is working on enhanced IP video conferencing that would allow automatic audio to text translation, which would allow users to review the conference archive and search back to a specific point of interest.

"This allows us to search that conference clip and find the actual key words that you are interested in rather than watching an entire two-hour clip to listen to what you are really interested," he said.

Check out eWEEK.coms for the latest news, views and analysis on voice over IP and telephony.

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