AT&T customers are preparing themselves in the event
the telecommunications provider merges with another carrier - a
possibility mooted at this week's Gartner Symposium ITxpo
2003.
One of the customers keeping an eye on that merger talk is
Atlanta-based Internap Network Services, which has a national
overlay backbone for internet services provided by AT&T and has
tried to insulate itself by providing redundancy with eight
additional backbones from other carriers.
"We did that because we didn't want all our eggs in one basket,"
said Jeff Hacker, national manager of alliance development at
Internap.
The suitor mentioned most often for AT&T is BellSouth,
according to Gartner analyst Jay Pultz. He put the odds of an
AT&T merger with another carrier at 40% over the next few
years, based on several factors, including an expected
consolidation in the telecommunications industry.
Neither AT&T nor BellSouth would comment on the possibility.
"That AT&T/BellSouth merger possibility has come up in waves
over the past three years, but it's not something we talk about,"
said BellSouth spokesman Todd Smith.
Giving credence to the idea is the fact that revenues at
AT&T and other carriers have fallen in the past two years, even
as the number of customers has grown, creating a market ripe for
consolidation, said Gartner analyst Tim Smith.
AT&T Tuesday reported a revenue loss in its third quarter,
although income for the period was higher.
With merger talk prominent, analysts advised customers to
renegotiate their long-term contracts to give them more options.
"Customers need to be able to say, 'I don't like this new partner,
and I don't think you'll follow your earlier strategy'," Pultz
said.
Following the analysts' presentation, several AT&T customers
said they feared a combined entity could move in directions that
could be adverse to their existing internal network plans. They
might be right, Pultz said, noting that past mergers have led to
technology shifts customers were unable to predict.
Company Knowledge Learning recently chose AT&T as its
principal voice and data service provider for nationwide services
for 25,000 workers. Matthew Mitchell, vice president of information
services, said he is alert to news about AT&T, but feels the
multimillion-dollar deal Knowledge signed with the company will
still be good even if a merger takes place.
One reason, he said, is that "any merger would take two to three
years" to have a full effect. Knowledge Learning chose AT&T
because it had both long-distance and local voice and data
services, with plans for local services that other long-distance
carriers could not match, Mitchell said.
Pultz said AT&T has lately set up a number of initiatives
that should be attractive to customers, including a plan to
consolidate its network technologies and improve customer service
by speeding up the time needed to provision new services and
respond to complaints.
Matt Hamblen writes for Computerworld