ATandT Drops $1 Billion on Cloud, Defends T-Mobile Deal

AT&T announced plans to invest $1 billion in 2011 in global network-based cloud solutions. Meanwhile, executives defended their T-Mobile purchase before a Senate panel.

AT&T may be best known for its ties to the Apple iPhone and aggressive moves in the carrier race to add new mobile subscribers. But it very much also has its sights set on supporting business customers. On May 10-as AT&T executives headed to Washington, D.C., to defend their intended purchase of competitor T-Mobile-they also announced plans to spend nearly $1 billion this year toward deploying "next-generation services for businesses ranging from the smallest firms to the world's largest and most sophisticated multinational companies."

AT&T will be targeting investments for government agencies and businesses in industries such as manufacturing, retail, hospitality, health care and automotive. The carrier said it plans to invest in five key focus areas, "like enterprise mobility applications and cloud/as-as-service enhancements" while rolling out "platforms, systems and e-capabilities" to automate and simplify business practices.

"We continue to invest significantly in cloud-based, mobility and networking sourcing solutions because customers are increasingly recognizing that transformative services like these increase productivity, improve operational effectiveness and lower costs," John Stankey, president and CEO of AT&T Business Solutions, said in a statement.

AT&T plans to invest in five key areas for its business customers this year. The first is mobile solutions and connected devices, and it noted that during the first quarter alone it added 1.6 million "emerging devices" such as tablets, netbooks and laptops, and that more than 12 million such devices are currently connected to its network.

A second area is cloud-based services, and AT&T says it has already cloud capabilities embedded into its network, enabling it to manage and deliver services and applications "as part of a total solution to any device."

Investment in a third area, global enterprise networking, will enable it to provide more robust, secure services to its "1,700 target multinational customers," and a fourth, small business customers, will help it to offer simplified service bundles and faster download speeds across it 22-state broadband footprint.

Finally, following on the 2010 launch of AT&T ForHealth, it plans to accelerate its delivery of cloud-based services and applications to the health care industry.

On April 20, AT&T announced fiscal first quarter results that pleasantly surprised even company executives by not faltering as much as expected, in the face of competitor Verizon Wireless offering an Apple iPhone 4 of its own. During the quarter, AT&T announced profits of $3.4 billion on consolidated revenues of $31.2 billion, sold 5.5 million smartphones and added 2 million new wireless subscribers.

Its subscriber growth, AT&T CEO Randall Stephenson said in a statement, was part of why it is working to acquire T-Mobile, whose spectrum would help AT&T to "simultaneously address spectrum issues created by this increased demand and improve customers' network experience as volumes continue to grow."

Executives from AT&T, T-Mobile and Sprint-which has actively come out against the purchase plan, saying it would devastate its ability to compete in the market-submitted to questions from a Senate Judiciary subcommittee May 10, regarding the deal. Gigaom's Stacey Higginbotham, who was at the trial, reported that, "the CEOs of AT&T and T-Mobile appeared to weasel out of attempts to get them to discuss confusing statements or get them to swear that prices would go down for consumers as a result of this deal."

She added that Stephenson confirmed that T-Mobile prepaid customers will get to keep their plans, and T-Mobile postpaid customers-who have feared a price hike-will be able to keep their plans if they upgrade to a comparable phone.

The deal needs to be approved by a number of federal regulatory bodies and isn't expected to reach a conclusion before the year's end.