AT&T, BT customers to gain from alliance

Customers of AT&T and British Telecommunications stand to reap the dual benefits of convenience and savings from a proposed joint venture between the two that will offer global telecom services.

The plan, which promises one-stop shopping for worldwide telecommunications lines, fits the description of what users have been waiting for, according to Phil Evans, senior telecom consultant with Perot Systems. "It's one of those visions of one-stop shopping in a global environment that will ensure very high-quality services at very cost-efficient prices," Evans said.

While the outline of the AT&T-BT plan sounds good to users, a dose of caution is advisable. The deal requires establishing a separate company and setting up a new network, both of which take time.

Plus, based on the geographic regions where the two companies offer services, the companies may have a few weak coverage spots, particularly in Asia, the Pacific and Latin America.

But given that BT has already run an international telecom joint venture, Concert, BT may be in a good position to anticipate and overcome problems that the new venture might face.

"Concert was a bold step forward, and I'm sure BT and MCI and the other players in Concert learned a lot. And I suspect a lot of the competitors learned a lot by observing Concert and trying to determine what they did right and what they might not have done so right," Evans said.

Beyond potential delays, the involvement of two companies could create problems for customers trying to nail down service guarantees, Evans said. "One company, one ownership gives you a better feeling that you can control or know what to expect from the company with which you are dealing. But the alliance is the next best thing to it. If there is no one company that can provide everything you are looking for, you go with the best that you've got," he said.

The promise that the companies will set up an IP backbone that can handle voice, video and data is attractive, according to Dick LeFave, vice president of the International Information Technology Users Group and chief information officer of Southern New England Telephone.

"The claim that it's going to be an IP network and it's going to be revolutionary from an industry point of view is great news. The problem we see with some of these things from a network side is it takes time and it takes energy, especially when you have two big players like BT and AT&T trying to work it out," LeFave said.

Perot Systems' Evans said he hopes the joint venture goes well, but recognizes that the companies face challenges. "I think [AT&T CEO C. Michael] Armstrong has a mission, and he's trying to execute on it. He's very talented in terms of being able to pull some of this off. [The venture is] big, it's got all the issues of trying to form a company as well as trying to move technology along."

LeFave agreed, despite AT&T's intent to pull out of some other international alliances. "If you look at how important this alliance is compared to perhaps some of the other ones they have done in the past, this one I think carries the fingerprints of Mr. Armstrong on it, so I think he is going to want to make it happen," he said.

While the excitement of using a new, cutting-edge network is appealing, potential customers should use prudence in dealing with the company. "With the big international customers, with the amount of volume on their networks, they're going to have to have some degree of assurance before they start switching [carriers] around," LeFave said.

Evans said current BT or AT&T customers can leverage that business relationship with the new venture. Customers can require procedures and service levels on at least on a par with what they are already getting, and ask for more, he said.

Expanding an existing relationship can also be easier than establishing a new one, Evans added. "For example, I know our network folks can work well with the network folks at AT&T with whom they have been working for months and months," he said.

LeFave agreed. "If you are using AT&T and BT today this could be an opportunity to enhance that further. Especially if you are looking to bridge Internet capability as well as having some voice capability.