Close
  • Latest News
  • Big Data and Analytics
  • Cloud
  • Networking
  • Cybersecurity
  • Applications
  • IT Management
  • Storage
  • Sponsored
  • Mobile
  • Small Business
  • Development
  • Database
  • Servers
  • Android
  • Apple
  • Innovation
  • Blogs
  • PC Hardware
  • Reviews
  • Search Engines
  • Virtualization
Read Down
Sign in
Close
Welcome!Log into your account
Forgot your password?
Read Down
Password recovery
Recover your password
Close
Search
Logo
Logo
  • Latest News
  • Big Data and Analytics
  • Cloud
  • Networking
  • Cybersecurity
  • Applications
  • IT Management
  • Storage
  • Sponsored
  • Mobile
  • Small Business
  • Development
  • Database
  • Servers
  • Android
  • Apple
  • Innovation
  • Blogs
  • PC Hardware
  • Reviews
  • Search Engines
  • Virtualization
More
    Home Applications
    • Applications

    Post Concert: BT and AT&T Will Survive

    By
    eWEEK EDITORS
    -
    October 17, 2001
    Share
    Facebook
    Twitter
    Linkedin

      British Telecom and AT&T both will recover decently from their ill-timed Anglo-American attempt to bring global services to multinationals, analysts say.

      In fact, the dissolution of the Concert joint venture – announced Tuesday – will help both long-distance telecoms focus on their core businesses, letting them speed deployment of broadband to their respective continents.

      The divorce will cost 2,300 jobs, and write-offs totaling $7 billion – $5.3 billion of it borne by AT&T.

      Still, the two telecoms have their original customers to fall back on, something that their aggressive but hard-pressed competitors in the global market – Equant, Global Crossing, 360networks and Level 3 Communications – no doubt envy.

      The two-year-old Concert venture was born when BT had designs on being a global operator, said Michael Cansfield, principal consultant with London-based Ovum market research firm. “BT now wants to concentrate on Europe, and they no longer can afford to pay for Concerts losses.

      Under the Concert venture, AT&T terminated some traffic in Europe and shared some of the cost with BT. A long-distance company saves money if the telephone call its customer is making both originates and terminates within the network, so Concert held the promise of trimming expenses.

      Conceptually, it was the right thing to do, said Blaik Kirby, vice president with Adventis telecommunications consulting firm. “But the voice market internationally got ugly.

      The pipe dream that demand would never slacken turned into a nightmare as competitors spent billions of dollars building out networks, exacerbating a glut in capacity that depressed prices and contributed to a recession in telecom.

      BT and AT&T also relied on older technologies, which meant they didnt spend nearly as much money as several of their competitors did on capacity. But that probably prompted some of its customers to defect to competitors, most of which havent been any more successful at making money on multinational corporations. AT&T and BT hoped that the partnership would increase traffic, but demand wasnt what they hoped – on either the wholesale or retail end.

      Each of the parents might have had higher expectations for what Concert would deliver, Kirby said. The cost of integrating the two networks also proved a thorn.

      The Concert business plan may have been fatally flawed anyway, because most of the customers were based in the United States, which meant most of the calls originated there. AT&T was paying out a lot more money to overseas operators to deliver calls on its customers behalf than it was getting in return. “That was a fundamental problem, Cansfield said.

      British Telecoms investors are relieved its out of the venture, which reportedly will lose $800 million this year. Its stock price got a boost on Tuesday.

      BTs rivals are promoting Digital Subscriber Lines far more now than in the past, Cansfield said. “Stopping losses in Concert will allow BT to concentrate on its broadband business, he said.

      AT&T still is the number one provider to U.S. multinationals, “and will remain that way for a long time, Kirby said. “No one is going to switch providers just because Concert isnt a part of AT&T anymore. It still has that reach and global presence, and still can become the dominant global carrier.

      As part of the dissolution agreement, AT&T will pay $1.8 billion for BTs stake in AT&T Canada.

      Analysts said its difficult to find a successful joint venture in telecommunications, because disputes over governance, management and meeting each parents goals inevitably muck up the best intentions.

      In a perfect world, where everyone plays well in the sandbox, joint ventures make sense, Kirby said. “But realistically in the competitive market, it doesnt work.”

      eWEEK EDITORS
      eWeek editors publish top thought leaders and leading experts in emerging technology across a wide variety of Enterprise B2B sectors. Our focus is providing actionable information for today’s technology decision makers.

      MOST POPULAR ARTICLES

      Big Data and Analytics

      Alteryx’s Suresh Vittal on the Democratization of...

      James Maguire - May 31, 2022 0
      I spoke with Suresh Vittal, Chief Product Officer at Alteryx, about the industry mega-shift toward making data analytics tools accessible to a company’s complete...
      Read more
      Cybersecurity

      Visa’s Michael Jabbara on Cybersecurity and Digital...

      James Maguire - May 17, 2022 0
      I spoke with Michael Jabbara, VP and Global Head of Fraud Services at Visa, about the cybersecurity technology used to ensure the safe transfer...
      Read more
      Applications

      Cisco’s Thimaya Subaiya on Customer Experience in...

      James Maguire - May 10, 2022 0
      I spoke with Thimaya Subaiya, SVP and GM of Global Customer Experience at Cisco, about the factors that create good customer experience – and...
      Read more
      Cloud

      IGEL CEO Jed Ayres on Edge and...

      James Maguire - June 14, 2022 0
      I spoke with Jed Ayres, CEO of IGEL, about the endpoint sector, and an open source OS for the cloud; we also spoke about...
      Read more
      Cloud

      Yotascale CEO Asim Razzaq on Controlling Multicloud...

      James Maguire - May 5, 2022 0
      Asim Razzaq, CEO of Yotascale, provides guidance on understanding—and containing—the complex cost structure of multicloud computing. Among the topics we covered:  As you survey the...
      Read more
      Logo

      eWeek has the latest technology news and analysis, buying guides, and product reviews for IT professionals and technology buyers. The site’s focus is on innovative solutions and covering in-depth technical content. eWeek stays on the cutting edge of technology news and IT trends through interviews and expert analysis. Gain insight from top innovators and thought leaders in the fields of IT, business, enterprise software, startups, and more.

      Facebook
      Linkedin
      RSS
      Twitter
      Youtube

      Advertisers

      Advertise with TechnologyAdvice on eWeek and our other IT-focused platforms.

      Advertise with Us

      Menu

      • About eWeek
      • Subscribe to our Newsletter
      • Latest News

      Our Brands

      • Privacy Policy
      • Terms
      • About
      • Contact
      • Advertise
      • Sitemap
      • California – Do Not Sell My Information

      Property of TechnologyAdvice.
      © 2022 TechnologyAdvice. All Rights Reserved

      Advertiser Disclosure: Some of the products that appear on this site are from companies from which TechnologyAdvice receives compensation. This compensation may impact how and where products appear on this site including, for example, the order in which they appear. TechnologyAdvice does not include all companies or all types of products available in the marketplace.

      ×