AT&T Needs New 'Underware,' Says CEO
Yesterday, Cisco Systems Inc. (Nasdaq: CSCO) bragged about its new BRAS (see Cisco Pads B-RAS Offering). Today, David W. Dorman, CEO and chairman of AT&T Corp. (NYSE: T), joked, in his keynote address, about his company needing a change of “underware."
Underware, in Dorman’s parlance, means the operations support systems (OSSs) that control everything carriers do. AT&T’s panties have got themselves in a twist from rolling out so many services using dedicated networks and management systems, just as has happened with other carriers, according to Dorman. Now, AT&T is tackling the issue under its Concept of One strategy based on offering multiple services over a common Multiprotocol Label Switching (MPLS) backbone.
Simplification of provisioning, billing, and other tasks associated with using business services will soon be as important as technology to carrier success, Dorman told a large audience gathered in a darkened ballroom of the Georgia Convention Center this morning. Customers are looking for a better "experience," he said.
Monolithic systems, multiple complicated OSSs, and a history in which carriers profited from having separate voice and data networks will soon hobble service providers that won't be able to keep up with customer demand for streamlined voice and data services, together with better security and reliability. That demand is specifically for faster, more unified processes associated with IP services, Dorman said.MCI in OSS Chaos).
In his keynote, Dorman gleefully laughed off concerns that his marketing folk might have about him using the term "underware." "I think we could have some fun with that," he said.
In the past, insufficient attention was paid to underware, says Dorman [ed. note: with some carriers, we hear, not changing theirs more than once a week]. Carriers spent most of their money on building their networks, and vendors haven't wanted to share their systems and software fiefdoms with competitors. "Marketing wars have proliferated databases and billing systems, exacerbating the problem," Dorman declared.
So what's Dorman doing about changing AT&T’s underware? Dorman was surprisingly specific. Of its $3 billion capex bill in 2003, AT&T will devote $500 million, Dorman said, to "improving the customer experience" by adding software to help improve billing, order management, and provisioning systems, Dorman said.
Among other things, AT&T will start using a new Master Services Agreement with business customers to replace multiple tariff-based contracts. In the past, contracts with enterprises that use several services from AT&T have snarled customer resources by calling for lots of lawyer time and internal maintenance.
AT&T also plans to improve the efficiency of its billing systems by about 25 percent, Dorman said, by the end of 2003. And for business customers, it will replace 30 billing systems with one by the end of 2004.
AT&T also plans to offer Frame Relay customers Web-based self-provisioning capabilities within 2003. Will that help? Depends™.
AT&T will rely on outside software suppliers for help in creating these systems, Dorman said, though he wasn't specific in his talk. One of the big beneficiaries is Accenture, which has landed contracts worth more than $3 billion (see AT&T: We're Saving Millions and AT&T Ponies Up $500M More ).
Some audience members apparently thought Dorman's message a fluffy one. "Not very enlightening," muttered one attendee (who obviously has underware problems of his own).
But the underware message struck a chord with at least one other audience member. "I haven't heard any U.S. carrier articulate their unified IP strategy so clearly," said the head of an Atlanta-based carrier consultancy. He said Telecom Italia SpA (NYSE: TI) had begun to quantify the savings possible from drawing together billing systems for a range of services, but he hadn't heard anything comparable this side of the Atlantic until this morning. "Usually I can detect BS, and I didn't hear any this morning."
In an unusual move, Dorman opened the floor to questions after his talk, fielding one from an Asian service provider who complained he couldn't compete with the debt-shedding capabilities of bankrupt U.S. competitors.
Dorman answered that, while some U.S. carriers, most notably MCI (Nasdaq: MCIT), have managed to shed massive debt thanks to restructuring, they may not be able to realize the same margins as non-Chapter 11 carriers, nor be able to grow top-line revenues as quickly. That's because they haven't been able to preserve the customer traction that more stable players have, he insists.
Dorman didn't hold back his feelings about MCI. At one point, he noted that a "very large spider" was crawling over his podium. "That's now a very dead spider," he said. "I'm not sure, maybe it was a WorldCom bug... Sorry, I couldn't resist that."
— Mary Jander, Senior Editor, Light Reading