AT&T comes back with a vengeance

Remember AT&T‾ If you are a European carrier, you better had. After years in decline, the giant is stirring once more. Last year's sale of the company to SBC looked to mark the end of an era for the one-time global giant, with little more than its famous brand set to survive. The latter was the case when SBC re-branded itself as AT&T, yet there were doubts over the survival of the international ambition that had once seen AT&T become one of the heavy-hitters - alongside BT and France Telecom - on the world telecoms stage
It had all began with Alexander Graham Bell. The telecoms pioneer sowed the seeds for what was to be come the American Telegraph & Telephone company in 1885. More than a century of relentless growth, not just in the US but in global markets, duly followed. By the time it celebrated its centenary, AT&T had become arguably the world's largest carrier and certainly its most well-established brand.
Backed by the pro-liberalization instincts of the US authorities, its presence in places such as Europe, still dominated by state-owned monopolies, struck fear into national carriers. Yet some ill-conceived strategies saw the company forced to dismantle itself, culminating in the 2005 sale to SBC for a rather paltry $15 billion. For many, that appeared to be that.

Corporate initiatives
In May, however, AT&T (in its new guise) announced two quite striking plans to expand its presence in non-US markets, most notably Europe. An agreement with Swiss-based WeRoam has paved the way for an additional 18,000 Wi-Fi hotspots for AT&T users in Europe. The company also announced an expansion of its global managed services business into Europe.
AT&T will target corporate users with a portfolio of European and global solutions that includes network and vendor consolidation WAN/LAN infrastructure design and construction, data center management, VoIP/network convergence assessments, telecoms aggregation and private network design/construction.
'This past year has seen impressive growth in the networking market as well as a strong need for these types of services,' said Mark Keiffer, chief marketing officer-business at AT&T Operations Inc. 'In today's global economy, telecom is vital to every country, and AT&T is at the forefront helping businesses grow and succeed. With AT&T's strong history and proven knowledge base in designing, building, operating and integrating networks, we're in an excellent position to provide these value-added services to our customers.'
US carriers were aggressively active in Europe in the 1980s and 1990s - not just AT&T, but major telcos such as MCI, NYNEX (now part of Verizon) and Sprint. A combination of increased competition at home after the 1996 US Telecom Act was passed and the disastrous effects of the dot-com implosion on carrier finances saw them rein in their global ambitions.
So are the latest actions of AT&T, and similarly aggressive noises from Verizon, a sign that they are on their way back‾ Perhaps. AT&T is on the verge of taking over another US telco, BellSouth, in a deal that would create a combined company worth some $150 billion - or twice the size of Europe's largest carrier. Reduced growth opportunities and intensifying competition at home might force the giant overseas once more.
It would be a mistake to get too excited, too soon. One source has it that AT&T's staffing level in EMEA at present comprises fewer than 15 engineers.

 

That's hardly the scale required of an all-conquering super-carrier. Yet it's not hard to imagine that if AT&T musters the intent to attack markets such as Europe, that headcount could be rapidly and dramatically increased. Last month, AT&T appeared to signal precisely that intent.
There is also the not ridiculous notion that AT&T might opt for a short-cut in developing its European business base. Some $30 billion would be enough to secure ownership of a Europe-based telco such as BT. The UK-based carrier remains active in the managed services market, not least since its acquisition of Infonet, and would be a good fit. Improbable though it looks right now, such a deal would at a stroke make AT&T a far more serious player in Europe than it ever managed to become during its 'glorious' heyday. TE

 

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