AT&T spins off cybersecurity consulting biz

AT&T will team with WillJam Ventures, a Chicago-based investor, to create a cybersecurity joint venture that contains the operator's managed security service operations.

AT&T officials said the move would allow the operator to put more focus on its remaining network-based cybersecurity offerings. AT&T's managed security service essentially works as a cybersecurity consulting service available to the operator's enterprise customers. The move dovetails with the trend by AT&T and other network operators to shed unwanted products and businesses in order to concentrate more directly on their core connectivity offerings.

For example, AT&T retreated from the video business with the spinout of its WarnerMedia operation to Discovery, forming Warner Bros. Discovery.

"Our direct focus remains on unlocking the power of our best-in-class connectivity with embedded security features that will allow our network to intelligently protect customers end-to-end," AT&T's Rick Welday said in a release. Welday is the head of the company's enterprise markets business, where AT&T's managed security service resides.

"We're energized about this new business model and the opportunities and capabilities these network enhancements will bring to the market," he added.

AT&T officials did not detail the number of employees affected by the move, nor the financial details of the transaction. AT&T said it expects the transaction to close in the first quarter of next year.

Cybersecurity remains a hot topic in the telecom industry. For example, Cisco recently announced plans to acquire data mining and cybersecurity company Splunk for $28 billion.

For AT&T, the move likely won't have much of an effect on its interactions with its enterprise customers. The operator partners with a variety of cybersecurity firms and will continue to work with the new joint venture once it is spun off. AT&T officials said cybersecurity remains a top focus of the company alongside reliability and expertise.

AT&T has been busy lately. The company managed to post a better-than-expected third quarter, in part due to the company's cost-cutting efforts. AT&T completed its $6 billion cost-savings project ahead of schedule earlier this year. Shortly afterward, the operator said it would trim another $2 billion or more off its annual expenses over the next three years. Similarly, Verizon last year embarked on a new cost-savings program it hopes will cut annual costs of $2-3 billion by 2025.