AT&T Goes Global (Again)

Expands its international capabilities, particularly in China, as it looks to reap rewards from a $10B investment

June 23, 2005

5 Min Read
AT&T Goes Global (Again)

AT&T Corp. (NYSE: T) hammered home its credentials as a leading global carrier today by announcing further network expansion, enhanced international access capabilities, and key partnerships with incumbent operators, particularly in China (see AT&T Expands Global Coverage).

The operator says that, since the collapse of its disastrous Concert joint venture with BT Group plc (NYSE: BT; London: BTA), it has spent $10 billion on building its own physical infrastructure, developing back-office systems, and implementing local support capabilities to support its large corporate customers (see AT&T and BT to Unwind JV).

Chris Rooney, president of AT&T sales, told a conference call that the expansion is in direct response to customer demands. "We go where our customers are, and where they want to be. The first requirement of our global customers is reach," stated Rooney.

He noted that AT&T's MPLS network, largely built using Cisco Systems Inc. (Nasdaq: CSCO) equipment, now has 1,500 owned service nodes in 80 countries and remote access in a total of 148 countries.

Rooney said new nodes are now being added in China, Croatia, Cyprus, Ecuador, India, Malaysia, Qatar, Panama, and the United Arab Emirates. In addition, AT&T has brokered interconnect agreements with China Telecommunications Corp. (NYSE: CHA) and China Netcom Corp. Ltd. (NYSE: CN; Hong Kong: 0906), and is establishing interconnections in Brazil, Canada, France, Germany, Ireland, and the U.K., to expand "in-country coverage. These countries are at the forefront of our business users' requirements. The new deals in China give us direct access to 135 cities there."

Rooney says that owning its own global infrastructure, which has the same network characteristics and shares the same back-office systems as AT&T's U.S. network, is vital for providing consistent services around the globe. "Our U.S. customer base is showing a huge drive in demand for international services, and the key customer demand is for global consistency of services and systems." (See AT&T Wins $27M Contract, AT&T Lands VPN Deal, AT&T Wins VPN Deal, and AT&T Wins $16.5M Services Deal.)

The $10 billion has been spent on building out AT&T's switching centers, cabling, back-office system developments, and building up local sales and support capabilities: AT&T now has more than 5,000 staff outside the U.S.

AT&T has also expanded the options customers have to access its network. Through partnerships with the likes of access aggregator GoRemote Internet Communications Inc. AT&T is expanding the number of wireless LAN public access points its customers can use from the current 9,200 hotspots to more than 15,000 by the end of 2005. It has also boosted the number of locations where it offers fixed Ethernet access by 400 this year to 1,700, is brokering DSL access deals with partners in Europe and the Asia/Pacific, and is trialing WiMax in New Jersey and Georgia with a view to potential use in international markets.

Rooney also referred to recent enhancements to the carrier's security and service development capabilities that will strengthen AT&T's pitch to existing and potential customers, which have other service providers to consider (see AT&T Adds to Security, AT&T Adopts Microsoft's SDP, and AT&T Intros New IP Services).

Those rivals include: BT, which recently propelled itself into the international market once again with the acquisition of Infonet, Radianz, and Albacom SpA; Equant, part of the France Telecom SA (NYSE: FTE) group; Global Crossing Holdings Ltd. (Nasdaq: GLBC); MCI Inc. (Nasdaq: MCIP); and the likes of NTT Communications Corp. and Singapore Telecommunications Ltd. (SingTel) (OTC: SGTJY) in the Asia/Pacific region. (See BT Buys Radianz, Wins Reuters Deal, BT Goes Global – Again!, BT Takes Control of Albacom, and Equant Agrees to France Telecom Buyout.)

But does AT&T really have something to shout about, or is this just a load of hot air? Mike Cansfield, a research director at consultancy Ovum Ltd., reckons AT&T is ahead of the pack in its capabilities.

"It's important that AT&T has rolled out its global services based on its U.S. standards. That consistency is important. And it has built itself a strong position in China, which is particularly important because China is such a huge engine of growth."

In comparison, he says that it'll take BT some time to build any kind of consistency across its international operations, and that France Telecom is no longer prepared to be the benevolent parent to Equant that it has been in the past. "France Telecom has other things to focus on, and economic reality is forcing Equant to put its books in order. It has to pay its way now, and that will limit what it can do in terms of network investment."

The Ovum man also notes that AT&T can attack the market with the financial strength of SBC Communications Inc. (NYSE: SBC) to back it up (see SBC to Buy AT&T for $16B).

"AT&T is here today, and it'll be here tomorrow in the international market. SBC is buying AT&T for its global business -- that's the most valuable part of its business," notes Cansfield. "And you can bet your bottom dollar that SBC will be firmly behind AT&T's international expansion."

— Ray Le Maistre, International News Editor, Light Reading

For more information on the services capabilities of the companies mentioned above, check out their listings in Light Reading's Ethernet Services Directory:

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