* Gartner’s latest Magic Quadrant assessment for U.S. network service providers
AT&T is the overall leader for corporate and government network services in the United States, according to the latest research on network service providers compiled by Gartner.
Gartner ranked the combined power of AT&T and SBC slightly ahead of the Verizon and MCI merger in the survey, which was released in May. Sprint Nextel came in third place.
Gartner did not consider AT&T’s planned acquisition of BellSouth, which was announced in March, because the deal has not yet closed. BellSouth was judged on its own merits but will clearly give AT&T additional customers in its nine-state region.
Gartner praised AT&T for its global reach, respected brand and world-class R&D organization. It said that SBC added a strong balance sheet as well as DSL and wireless products and customers to the mix.
“AT&T’s strategic direction continues to be using a global, broadband IP-centric network, coupled with a rich array of managed, value-added and professional services while simultaneously improving customer service through back-office integration,” Gartner says. “AT&T will appeal to companies that want a full-service provider with good geographic coverage.”
AT&T was rated highest in the Leaders square of Gartner’s Magic Quadrant grid for both its ability to execute and its completeness of vision. Verizon also was in the Leaders square but was situated below AT&T in both areas.
Gartner found that Verizon is “not as far along in developing a value-added service portfolio or an integrating the back office” when compared to AT&T.
“Verizon Business needs to shore up customer support and service,” the Gartner report added. “Even before AT&T announced it was buying BellSouth and gaining full control of wireless joint-venture Cingular, we viewed AT&T as ahead of Verizon in fixed mobile convergence.”
Gartner moved Sprint Nextel out of the Leaders quadrant into the Challengers quadrant because it has shifted its focus to concentrate on corporate mobility and wireless needs. Gartner points out that Nextel boosts Sprint’s PCS offerings but says the cultures of the two companies are different.
“Sprint Nextel still generally provide above-average service and support, with pricing that is usually more expensive than average,” Gartner says. “Sprint Nextel will appeal to customers looking for a domestic full-service provider with strong wireless capabilities.”
Sprint Nextel was the only network service provider in the Challenger quadrant of Gartner’s grid.
The other eight companies that were big enough to be considered in this report – service providers needed revenue over $250 million, with 30% of revenue coming from enterprise customers – all fell in the Niche Players category of Gartner’s Magic Quadrant.
These companies included: Qwest Communications, Global Crossing, Broadwing Communications, BellSouth, T-Systems, Savvis, XO Communications and McLeod USA.
Regarding Qwest, Gartner praised the company’s ability to reduce long-term debt and stabilize revenue for improved financial stability. Gartner says Qwest still needs to improve customer service and support. Gartner predicts Qwest either will be acquired or will acquire another carrier.
“Qwest will appeal primarily to companies located in its region, or those that are looking for aggressive pricing,” Gartner says.
Gartner says Global Crossing also has improved its financials and is offering a broad array of network services that appeal to midsized companies. “Global Crossing will appeal to multinational corporations looking for competitive pricing or looking for a secondary provider,” Gartner says.
Gartner also highlights Broadwing, XO Communications and McLeod USA as potential secondary providers for multinational corporations. Broadwing offers VPN and VoIP services nationwide. XO focuses on voice, data and hosted services for small to midsized business. McLeod USA offers voice, data and Internet services to smaller companies in smaller cities.
Gartner recommends Savvis as having a strong portfolio of managed and hosted services but says the company is experiencing more customer service complaints. Gartner also says Savvis is behind in its rollout of MPLS technology. “Savvis will appeal to companies looking for hosted applications in a managed network services environment,” Gartner says.
Finally, Gartner highlights T-Systems as an option for multinationals that have strong European network needs. T-Systems is a subsidiary of Deutsche Telekom, with strong financials, top-quality service and competitive pricing.
Overall, Gartner recommends that enterprises pursue a multiple-carrier strategy that includes both Tier 1 and smaller network service providers.
Gartner releases a Magic Quadrant assessment for U.S. network service providers every six months.
