AT&T to ring changes in Ireland

Senior AT&T executive Bill Archer is a believer in the power of markets regulating themselves. Given the changes at the US telecommunications giant, where he is president for the Europe, Middle East and Africa region, during his 25 years of service, that's hardly a surprise.

The company was broken up by the US government in 1984 as the result of an anti-trust case that had been running for over 10 years. AT&T was forced to spin off its local telephone operations into seven so-called Baby Bells.

AT&T handled the long-distance business, diversified into cable television and built a significant overseas business serving US multinationals, but it was still a shadow of its former self when SBC acquired it for $16 billion (€13 billion) last year.

It effectively meant a Baby Bell had taken over the mothership.

Last month, the "new" AT&T announced it was acquiring BellSouth in an all-share deal worth $67 billion. It means AT&T is the largest telco in the US and has full control of Cingular, the largest mobile phone company in the US, in which all three firms previously held a stake.

"It's a popular characterisation of what's happening - the old AT&T coming back together," says Archer. "But the AT&T, the SBC and the BellSouth of today don't resemble in any way, shape or form the AT&T of 1983 when divestiture occurred. The marketplace is so much more competitive. Our global business didn't exist back then. The market is dictating that if you want to be big and compete in networking you need to have scale."

While this might be true, technology and telecoms mergers have had mixed success. However, Archer points to the many acquisitions SBC and AT&T have been involved in, saying "by all measures they've done them well".

AT&T has also been in the spotlight for its position on the net neutrality debate. While telcos own a large part of the infrastructure that the internet runs on, they are not compensated by companies such as Google and eBay, who send data to customers over those pipes.

AT&T and other operators have said the companies benefiting from the internet should look at subsidising those costs. But in some circles, it has been presented that the telcos want to create a tiered internet, where consumers would have to pay more to access services like video downloads. Archer feels AT&T's position is misrepresented.

"We are not looking to block access or control access of our customers to content on the internet in any shape, way or form. It would be counter to our own interests because we have a very large broadband business," says Archer.

However, he feels the internet cannot grow indefinitely under the current economic model and suggests the marketplace will dictate a solution. While AT&T is a major force in consumer and business markets in the US, with a portfolio that covers everything from wireless communications to cable TV, its international business is different. In Ireland, it focuses on providing voice and data services to corporations.

AT&T's operations in Ireland are modest. It has just under 10 people working here in sales and business development and concentrates on 20 key customers in the high-tech and pharma sectors. Despite this, it has invested significantly in infrastructure.

It now has three MPLS nodes - connection points to its global network - in Dublin and Cork. As part of an $8 billion worldwide capital investment planned for this year, it plans to roll out broadband DSL and ethernet services in Ireland. AT&T is reviewing its Irish suppliers, but it is expected Eircom will win a significant amount of the business due to the sheer size of its network. However, Archer says it is AT&T strategy to have more than one supplier in each market.

He also plans to expand the customer base in Ireland and move beyond its traditional patch. "There are a select group of Irish headquartered multinationals with whom we are in the early stage of forming relationships or taking relationships we have in the US and globalising them," he says.

Changes in technology have meant telcos like AT&T have had to become technology and integration specialists as much as network access providers.

With most of its global customers having moved to a common internet protocol (IP) based platform for network connectivity, the next step, Archer says, will be for them to implement converged applications that take advantage of the fact that voice, video and data can now run on a single network and be more easily integrated.

He got a progress report on how some customers are doing that at a meeting of AT&T's regional advisory council, which was held in Dublin this week. The council, which meets twice a year, allows customers to provide feedback to AT&T.

"Ireland's an up and coming area of business and economic activity, so we thought Dublin would be topical spot to hold this meeting," he says.