AT&T invests in its global network

AT&T Corp. is planning to spend US$500 million this year to improve its network and services for its enterprise customers worldwide, but one industry analyst says the announcement won’t have any immediate implications for the Canadian market.

The telco said it plans to consolidate its legacy network into a single Internet Protocol (IP)-based network by 2005. Frame Relay customers will be able to implement IP virtual private networks (VPNs) using its BusinessDirect Web-based tools to provision services. Through the development of its IP optical core network, it will provide security, messaging and directory capabilities so that businesses can run applications such as customer relationship management (CRM) from different vendors.

The company is also simplifying its contract structure to provide its services under a single agreement and plans to extend wireless fidelity (Wi-Fi) hotspots to airports and hotels. Lastly, it plans to roll out enhanced sales and servicing tools for customers to manage and monitor their networks in real-time. The company said it feels these announcements will help its future dealings with global customers.

“In a period of time when capital is constrained, we believe that AT&T is in the unique position to capitalize and we have been investing very specifically in the area of improving [the] customer’s experiences with telecom services,” said David Dorman, AT&T chairman and chief executive officer during a conference call.

While the telco’s emphasis is squarely on enterprise and multinational customers, it is through AT&T’s Global Services division in Canada that the new services will be available to customers here. As of April 1, AT&T Corp. was no longer a shareholder in AT&T Canada, and even though existing enterprise customers will remain with AT&T Canada, this means the two companies could be competing for business.

AT&T Corp.’s strategy in Canada was compared to its approach in other parts of the world. During the same conference call, Justin Sims, the company’s vice-president of global services, noted its decision to sell its 69 per cent stake in the Latin American market, saying that decision was made “to really get out of the domestic market within the region.”

“Our strategy for Canada [AT&T Corp.] is similar to that of Latin America, although the demands spurred by our strong U.S. customer base means that we can justify a much denser in-country network in Canada,” he said.

Still, as Sims outlined, several other regions appear to be more of a focus for the telco. For example, outside of the U.S., Japan represents its largest source of revenue, employing 1,500 people, serving 15 markets and approximately 5,000 customers. Europe also represents a growth area because its reliance on wireless services melds well with AT&T’s Wi-Fi strategy.

One industry analyst said Canada isn’t high on the telco’s market radar.

“These announcements in the U.S don’t have an immediate (and) obvious relevance for Canada,” said Brian Platts, associate consultant at NBI/Michael Sone Associates Inc. in Toronto.

When asked if AT&T Corp. would be looking at enterprise customers in Canada, Platts responded, “For the foreseeable future it will be a hands-off approach.”

AT&T Canada is online at AT&T Corp. can be found at