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New investment by a new AT&T

01 March 2006

Having been absorbed by SBC, to which it has given its name, AT&T is planning investments of over $8 billion in increasing its network penetration, not only in the US but in developing economies and established international markets. EMEA president Bill Archer explains the strategy

Bill Archer picture
Bill Archer: merging and
integrating AT&T
into SBC
If Verizon's key international challenge — follow this link — is to achieve worldwide recognition for a name that is hardly known outside the US, Bill Archer should have a head start.

He's president of AT&T's operations in Europe, the Middle East and Africa, and he's already spent the last two years re-establishing his company's brand across the area, after a spell during which it was subsumed into an ill-fated joint venture with BT called Concert.

But as from the beginning of this year AT&T is a different animal. Indeed, the company seems to like calling it the New AT&T, to signify the change. Because it's really SBC — which had about the same international profile as Verizon — following its merger with the old AT&T, the one Archer's been working for.

Days after the merger was closed, SBC, under its new name, announced details of plans to expand its network in the US and around the world, a move particularly aimed at multinational enterprise customers.

The interview took place before the most recent twist, an agreed merger between the new AT&T and BellSouth, one of the last remaining Baby Bells. That, if it goes ahead, will create a yet larger AT&T — a New New AT&T.

Multinational customers

The capital investment is expected to be $8 billion to $8.5 billion, said the New AT&T. "We're in the business of working with large multinational companies, headquartered in the US with worldwide operations or headquartered outside the US and with a presence in the US," says Archer.

The network reaches 127 countries round the world, he says, and "it is well integrated with the existing AT&T capacity in the US". The new investment will extend into "new developing economies in the Middle East" and "deepens the footprint in Europe, Asia and Latin America", he adds.

In the US, AT&T's existing backbone is being merged with SBC's network for business clients: "It's a merging and an integration," says Archer.

The company is installing and commissioning new points of presence in places such as Cyprus, Saudi Arabia, Pakistan, Malaysia, India and Vietnam. "We're moving there because our customers are telling us that's where we need to be." And it's setting up peering connections with local operators at 16 points around the world.

Archer would not say how much of that $8 billion or so would be spent outside the US. "We don't break capital spending out discretely," he says. "But it's a fairly ambitious programme for 2006."

All-IP strategy

The old AT&T had a clear programme to move to an all-IP network. Former CTO Hossein Eslambolchi explained in an interview with Global Telecoms Business in the September/October 2003 issue his vision that "IP will eat everything". He had a project called the Concept of One to merge many, many network silos into a single system.

Eslambolchi left during the merger but the IP vision lives on. "We will be moving customers to a consistent single platform," says Archer. The first step is to bring the merged networks to a common platform.

Is there a timetable to move to all-IP? "That's probably a more complex answer that we can give in a few minutes," says Archer. "It's a big part of the synergies" of the merger. "It's happening as we speak. It's an enormous undertaking affecting customers and providers."

Highlights of the 2006 planned expansion include:

  • extended dedicated MPLS-based IP access capabilities, giving service nodes in 127 countries;
  • integration of 1,000 legacy SBC nodes into AT&T's global MPLS-based network;
  • new network interconnections giving greater in-depth country coverage;
  • additional remote access points giving a total of more than 35,000 access points in 150 countries;
  • doubling DSL country coverage for business access, via alliance agreements with local carriers;
  • tripling ethernet country connectivity;
  • enhanced satellite, wifi and wireless access.
"We feel now like we have the global scale and financial resource of scope and capability to really capitalise on the opportunity," says Archer, paying tribute to "SBC's financial management skills and AT&T's portfolio".

And did SBC need educating in the international marketplace that it has to address now that it has acquired the old AT&T and become the new AT&T? "No," smiles Archer. "They acquired AT&T for the presence of large businesses and by definition they are global." GTB 




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