Tuesday, September 19, 2006

AT&T's Strategy Seeks Scale, New Services

The key to success in this industry is achieving scale, said
Randall Stephenson, AT&T's Chief Operating Officer, speaking at the Goldman Sachs' Communicopia conference. AT&T's plan is to achieve the No. 1 market position in all of the sectors it serves: enterprise, wireless, broadband and, soon, IP video. The large scale achieved through its mergers will help the company achieve the greatest efficiency and lowest cost structure. Providing the No.1 customer experience is the operational goal of the company.

AT&T's IPTV launch in multiple markets is still slated for later this year. The San Antonio launch has been positive in terms of achieving 10% market share penetration. Stephenson said the service has resonated very well with customers. Establishing a retail channel where customers can play with the service before purchasing will be key. Installation times have averaged about 5 hours, although the company is hoping to bring this down to 3 to 4 hour range. An HD version of the service is under development.

The BellSouth transaction is moving ahead in terms of regulatory approvals. AT&T is optimistic the deal will close this year.

Fixed-mobile convergence presents an exciting opportunity for AT&T to differentiate itself, said Stephenson, especially with such a huge calling footprint of AT&T wireline + Cingular Wireless. The company believes an IMS layer will make this a seamless experience, something that independent operators, such as a Vonage, will not be able to achieve.

Once the BellSouth deal is complete, the company will drop the Cingular brand and go with the AT&T brand.

An archived version of the presentation in on the AT&T Investor website.



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