AT&T Unveils Domain Supplier Strategy

Following months of speculation, AT&T confirms its slimmed-down approach to key vendor selections

September 4, 2009

3 Min Read
AT&T Unveils Domain Supplier Strategy

Following months of speculation that it is revamping its technology sourcing strategy, AT&T Inc. (NYSE: T) today launched its Domain Supplier program, a "major change in the way the company sources new technology for its core network."

Light Reading previously reported on AT&T's plans in June, when talk that the carrier would select two vendors in each of 14 separate categories first appeared. (See Analyst: New AT&T Policy Puts Vendors at Risk.)

The operator confirmed in today's announcement that it will have "two suppliers selected and pre-qualified by AT&T" in each domain, presenting a "significant opportunity for them to work in that domain for a set multi-year period." However, "there is no guarantee of any business award," the operator added.

AT&T hasn't specified how many domains -- "areas of the future network bounded by a particular technology set" -- it will have, but it did offer up the example of Wireline Access, which "includes technologies such as IP/DSLAM and FTTx."

An AT&T spokesman says the company has identified seven or eight domains so far, and "we may be defining further domains in the future." He declined to identify the domains.

AT&T is also keeping tight-lipped about its domain vendors. "Some have been chosen and notified," is as far as the spokesman would go.

It's hard to imagine, though, that Alcatel-Lucent (NYSE: ALU), Cisco Systems Inc. (Nasdaq: CSCO), Ciena Corp. (NYSE: CIEN), Ericsson AB (Nasdaq: ERIC), and Microsoft Corp. (Nasdaq: MSFT) won't be among the chosen few.

The name all other vendors will be hoping isn't included in AT&T's selection is Huawei Technologies Co. Ltd.

AT&T says the new approach will benefit the chosen few by "allowing them to work more closely with AT&T by sharing timelines, project roadmaps and other information and, ultimately, enabling them to more quickly realize revenue due to expedited deployment of their hardware or software."

Being a domain vendor goes beyond just leaving a box at AT&T's doorstep, the release adds. "Suppliers selected for each domain will be responsible for the integration, testing, support and delivery of the complete end-to-end solution for the equipment or software in the domain that they have been awarded. If a selected domain supplier chooses to work with a third party to deliver the technology within their domain, they will be expected to completely integrate, test and support the third party provider's technology into the end-to-end solution."

BT Group plc (NYSE: BT; London: BTA) took a similar approach with its 21CN next-generation network program: BT chose a number of initial key suppliers and tasked them with finding the appropriate partners that could deliver the right end-to-end solutions.

That process, though, has resulted in some bitterness from the smaller vendors co-opted by BT's main equipment partners, with accusations in some cases that the extended partners had their technologies compromised, and that they were forced into margin-squeezing arrangements that threatened their financial health.

— Ray Le Maistre, International News Editor, Light Reading

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