AT&T Inc. is the most extensive United States provider of both local and long distance telephone services and wireless service. As a market leader and one of the most advanced and powerful telecommunication companies, AT&T pays excellent attention to the future of the industry, for the more diverse and productive achievements of new technologies to be introduced to the AT&T customers worldwide. This concept was named the “meaningful innovation” and was inherited by AT&T from its predecessor companies (which combined have more than 6,000 patents and 7 Nobel Prizes). The AT&T Laboratories, founded in 1925, are famous for having developed some of the world’s significant technological inventions, including the transistor, the solar cell, and the communications satellite, which, in turn, have enabled today’s computers and electronic devices, wireless phones, and VoIP. AT&T Corp. Now provides voice, video, data, and Internet telecommunications and professional services to businesses, consumers, and government agencies.
The company now faces numerous opportunities to improve and enrich the list of the services it provides, and the top managerial choices for the nearest future (3 years) include Videoconferencing, VoIP, Wireless Networking and Information Security. The basis for the introduction and development of these services is the point of severe consideration and extensive research.
Brief Background on the company (AT&T)
The AT&T history makes this company one of the most respected and popular ones in the United States and abroad. The roots of the company date back to the formation of the Bell Telephone Company by Alexander Graham Bell in 1876. Ever since the company survived a great number of restructuring processes and changes. It has also gained the nationwide telephone services provider status and introduced an impressive amount of services for the company’s customers.
By the time the AT&T had to split its local operations, in 1983, the company was able to proudly present the earlier introduction of radar, sonar, stereo, teletype, the transistor, hearing aids, artificial larynxes, talking movies, and the telephone.
Since then, the technological evolution and the emergence of new services and technologies have put AT&T onto the verge of the new high-tech era that integrates the communications and entertainment services. Today the AT&T serves millions of customers around the globe, including global, national, mid-size, regional and government customers. It delivers an unsurpassed portfolio of traditional and IP-based voice, broadband Internet, data transport, wireless and video services. It also offers online and prints directory publishing and advertising.
For example, the contemporary services for the mass market include broadband DSL, Wi-Fi connectivity at more than 28,000 hot spots in the United States and the world, broadband service for on-the-go customers in a total of 55 countries globally, home and small-business networking, wireless services, satellite television and, beginning with limited rollouts in late 2005 and 2006, IPTV entertainment services, local and long distance voice services, messaging services and much more.
The first serious attempt to make a step into internet technologies took place in 1998 when AT&T announced a US$1 billion alliance with BT to offer global voice over IP (VoIP) services. But the merger failed to take place due to the management and control conflicts between the parties.
On the verge of the new millennium, the company faced the overall weakening of the telecommunications services market, and in October 2000 AT&T undertook a significant reorganization, moving its mobile phone and broadband units into separate companies, to allow each group to raise capital independently.
It is how AT&T Wireless Corp. emerged in 2001, with AT&T Broadband and Liberty Media, which comprised its cable TV assets appearing later the same year. Comcast subsequently acquired AT&T Broadband in 2002, and AT&T Wireless merged with Cingular Wireless LLC in 2004.
The current AT&T Company was formed in 2005 when SBC Communications’ purchased of its former parent company, AT&T Corp.
On March 5, 2006, AT&T announced the purchase of BellSouth for $67 billion. The new company would retain the name AT&T. When completed, this deal will consolidate ownership of Cingular Wireless, currently a joint venture between BellSouth and AT&T. After completion of the merger, wireless services would be offered under the AT&T name.
Discussion of Current Business Issues
The AT&T Company provides services worldwide. International voice solutions are delivered to 240 countries, linking 400 carriers around the globe. Remote access solutions are provided from more than 39,000 points of presence in 149 countries. Cingular delivers the broadest international coverage of any U.S.-based wireless carrier, giving customers the ability to make calls using an internationally enabled phone on six continents and 170 countries, with wireless data roaming in 70 countries for laptops, hand-held devices, and other data services.
The rapid grows, and development of the telecommunication industry puts new challenges to the company’s strategic management. A multitude of services are emerging daily, and the proper choice of the future favorites is the key to the organization’s success.
Among the issues chosen by the executive board are such services as VoIP, Videoconferencing, Wireless Networking and Information Security.
Videoconferencing, as it can be seen from the name of the service, is the communication across long distances with video and audio contact that may also include graphics and data exchange. The service enables to significantly reduce the businesses’ travel expenses and optimizes its costs while making communication easier.
This service can be provided in various forms: point-to-point videoconference (videoconference between two sites), multi-point videoconference (with more than two sites, that must connect via a video bridge – multipoint conferencing unit), room-based videoconferencing (videoconferencing using a sophisticated system is appropriate for large groups), desktop videoconferencing (videoconferencing on a personal computer – it is most appropriate for small groups or individuals). Many desktop video conferencing systems support document sharing.
Videoconferencing is the perfect solution for an increasingly global marketplace. Smart businesses take advantage of today’s technology to communicate efficiently across vast distances.
AT&T has already begun to provide such solutions to individual clients. For example, on April 12, 2006, AT&T Inc. today announced a new contract to provide enterprise hosting and network services to John I. Haas Inc. Under the terms of the two-year contract, AT&T will implement data hosting and a Multiprotocol Label Switching (MPLS) private network. The MPLS network serves as a backbone technology, delivering a private IP-based system and enabling the more comfortable use of various communications services, such as video conferencing and audio conferencing. John I. Haas Inc. intends to integrate IP data, VoIP and video conferencing over the single MPLS network, allowing more efficient use of IT resources. AT&T’s MPLS network includes more than 1,500 nodes, with service availability in more than 127 countries.
Voice over Internet Protocol (often referred to as VoIP, IP Telephony, Internet telephony, and Broadband Phone) is the process of routing voice conversations over the Internet or any other IP-based network Internet (e.g., on a private building-wide LAN).
With the arrival of the VoIP concept, the service had been a real innovation “star,” winning numerous admirers worldwide – and the market continues to grow.
That is why AT&T has recently introduced a wide range of VoIP Services that enable customers to evolve to the next generation of converged communication services. Among them there are services framed for corporate networks (VoIP with AT&T’s VPN services seamlessly connect the entire enterprise and provide customers with high-quality voice communications), branch offices (enabling the advanced communication features throughout the entire enterprise), remote workers (“always at their desk” service) and Call Centers services (IP-enabled call centers may improve their work efficiency). AT&T offers a broad portfolio of VoIP solutions designed to assist other companies to achieve their business objectives.
AT&T’s VoIP services are proclaimed to be delivered with the quality of service, reliability, and security required for business communications. But in fact, IP does not provide and the ideal mechanism to ensure that data packets are delivered in sequential order, or provide any Quality of Service guarantees, VoIP implementations may face problems dealing with latency (especially if satellite circuits are involved), and jitter. Some broadband connections may have less than desirable reliability. Where IP packets are lost or delayed at any point in the network between VoIP users, there will be a momentary drop-out of voice. This is more noticeable on highly congested networks and where there are long distances and the endpoints interworking. This does not diminish the AT&T services’ quality, but still, there is a lot to be done in this sphere. Over time, the technology has improved the voice quality and reliability, and will undoubtedly continue to improve the VoIP services performance.
Wireless Networking (WiFi)
WiFi((short for Wireless Fidelity) stands for the wireless networking, which means that one can connect computers anywhere without any wires. Wireless networking refers to wireless LANs. The computers connect to the network using radio signals. WiFi, as well as video conferencing, belong to a so-called Third Generation of wireless telecommunication services (3G) (see Figure 1 for the list of services on different levels of development). There are two kinds of wireless networks: an ad-hoc (or peer-to-peer) wireless network that consists of some interface card-equipped computers and each computer can communicate directly with all the other wireless-enabled computers. They can share documentation and printers this way, but may not be able to access wired LAN resources, unless one of the machines acts as a bridge to the wired LAN using specialized software (“bridging”). The second type uses an access point or base station.
Nowadays, AT&T provides Wi-Fi connectivity at more than 28,000 hot spots in the United States and the world, offering broadband service for on-the-go customers in a total of 55 countries globally (including company-owned and roaming locations). And there is still more to gain because the service is top-rated.
The information security issue is one of the essential problems primarily due to an extensive among of information circulating among business units, individuals, and other telecommunication users. This service can be applied to all the services mentioned above – video conferencing, VoIP and wireless networking. Although it is a matter of the initial concert – it is developed only after the services are introduced and applied. This “retarded” feature is the main drawback of almost all existing wireless services. So the information security is the issue of the initial concern.
For example, the majority of consumer VoIP solutions do not support encryption. Thus, it is relatively easy to eavesdrop on VoIP calls and even change their content. There even are open source solutions like enable people to do that. A modicum of security is afforded due to patented audio codecs that are not readily available for open source applications this idea has not proven effective in the long run in other fields. Some vendors also use compression to make eavesdropping more difficult. However, real security requires encryption and cryptographic authentication which are usually not available at a consumer level.
AT&T services are relatively secure – at least of business customers that are willing to be enabled with these services. Members of the AT&T Information Security Center team develop necessary programs and services for ensuring a secure information share process. Still, there is a need for the information security services to be more universally applied.
Recommendations for the Executive committee
The general review of the four main alternatives of strategic development proves that the most popular service, by the end of 2004, there already were around 1.3 million broadband lines in the U.S. In-Stat expects the number of lines to grow to 3.9 million by the end of 2005.
There are some companies which want to be leaders in the VoIP industry, but AT&T has a high potential due to its market strength and financial power. AT&T’s primary challenge VoIP provider is Vonage. By the end of 2005, AT&T expected to have 1 million homes and businesses as VoIP customers, and the market will still be at its initial occupancy. Even in 2004, AT&T reported that they expect VoIP to become a voice traffic standard.
It is highly recommended for AT&T to concentrate upon VoIP as a “star” service; taking into account is mass popularity worldwide. Being the market leader in this sphere is the opportunity AT&T must not miss.
The VoIP, wireless networking, video conferencing and informational security are all interconnected, so it is quite difficult to choose between them and set a priority. But the most logical choice is the support of the existing accessible services and their maintenance and development. AT&T already has an impressive wireless networking and VoIP elements in its services structure. The market predictions show that these services will remain highly popular and rewarding shortly. The concentration of efforts, financial assets and marketing instruments on them should be a choice of the strategic management.
Videoconferencing is a choice of the farther future, though it certainly gains popularity among businesses. The level of service AT&T provides now is sufficient for the existing customers. It is much more important to concentrate on the improvement of the technologies first of all regarding information security. It is the feature most required by modern businesses that have an intense competition on the global market.
The most efficient strategic program, though, might include a combination of the four chosen services, especially taking into consideration their interconnection and interoperability. AT&T could provide its customers with a packet solution aimed at optimising the business network, ensuring its effectiveness and optimisation. The idea of the combination of services will make both the AT&T and its customers benefit. The first will be able to implement and develop all the existing business solutions and promote their global use. The latter will have an opportunity to improve the overall performance and make even more considerable progress, which is a valuable opportunity in the modern highly-competitive business environment.