Ovum comment: AT&T gets serious about FMC

Ovum analysts
19 Apr 2007
00:00

The main announcement is that business customers - small, medium and large - will be able to include wireless services from AT&T (formerly Cingular) in their wireline contracts.

In addition, AT&T announced that it was integrating AT&T mobile data access into its remote access client, and providing a small office backup solution using HSDPA.

The inclusion of wireless services in wireline contracts will allow customers to extend their minimum spend commitments and on-net calling plans to their wireless services, which should lead to cost savings.

Small business customers will also be able to receive a single bill for wireline and wireless services, although larger customers will have to wait longer for this functionality.

Ovum analysts Jan Dawson, Jeremy Green, Pauline Trotter comment:

This early step in integrating wireless and wireline services is not exactly earth-shattering, particularly when compared to developments in Europe. Several European providers already offer this capability, including BT and Vodafone, although AT&T is beating its major US competitor, Verizon, to the punch.

The wireless backup solution is not that different from an existing solution available from competitor Verizon Wireless which launched quite some time ago, and Telstra has a similar offering in Australia. The inclusion of AT&T wireless services in the remote access client is also a logical next step.

AT&T also continues to suffer from naming issues. Having made the decision to re-brand the entire company, including Cingular, under the AT&T name, it has been struggling to figure out how to allow its wireless capabilities to shine when buried under a wireline brand.

AT&T Mobility and AT&T Mobile Solutions are internal names used to distinguish the business formerly known as Cingular, but these aren't used externally (where most people are still puzzled about what exactly 'Cingular is the new AT&T' actually means).

On the positive side, though, what is striking about these announcements is that they come just under four months after AT&T's acquisition of BellSouth and Cingular completed, at the end of 2006.

Sprint, which integrated its wireline and wireless operations several years ago, has moved much more slowly to provide integrated services to customers since its acquisition of Nextel, which has been a drain on resources and a distraction from pursuing FMC. Verizon, handicapped by its shared ownership of Verizon Wireless with Vodafone, has also moved slowly.

AT&T, on the other hand, is demonstrating that it is committed to driving fixed mobile convergence in the enterprise, albeit with some initial baby steps. Its roadmap for future FMC services is also encouraging, and if it continues to move with the same speed in executing on the other elements of that roadmap, it should take the lead in providing enterprise FMC in the US.

Verizon and Sprint will need to pick up the pace of their efforts in this area if they are to keep up. Sprint, in particular, which wants to use convergence as its main counterbalance to Verizon and AT&T's superior scale, really needs to step up its efforts to provide converged services to businesses if it wants to survive.

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