AT&T’s “Transformation” Begs Disbelief

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In general, AT&T is a competent service provider with the most established brand in the industry, and thus, no manager needs to fear ever getting fired for selecting the company over other competitors. At the same time, no other carrier in the world is close to being as encumbered on such a large scale with so many layers of antiquated technology that it actually cannot even come close to pinpointing the myriad possibilities for a major crash of services with an aggressive “Network on Demand” transition. While AT&T can do workarounds with virtualization to some extent, we doubt that executives at companies like Verizon, CenturyLink, Level 3 Communications, and Zayo Group are losing any sleep over a firm, which has not historically been inclined to be a mover and a shaker.

AT&T certainly has been actively promoting itself as a new company and some people in the press and at consulting firms are placing it at the top of the supposed innovation heap just based on the rhetoric itself (a very common practice over several decades of just taking hyperbole from conglomerates at face value). It is true that some of these individuals are at least indirectly hedging their bets with a discussion of the cultural challenges faced by all incumbent operators. We have no doubt that AT&T would very much like to reduce its operational costs substantially even to the point that we believe that it has been more inclined to deploy less reliable devices in its network, which could obviously result in negative consequences in the future.

Extending on the topic, and putting aside the obvious number of inherent risks associated with getting into a brand new territory like virtualization, AT&T has had its hands full in dealing with its vulnerability on its existing network. Over the last year, there have been over a dozen acts of vandalism involving fiber cuts in northern California and this past August, customers in several states were affected by the severing of a fiber as well. Perhaps AT&T needs to put more emphasis on more practical pursuits, such as protection switching and backup fibers, to ensure no loss of service (which one would think should be a given with any major carrier) before engaging in a big way with its new SDN plans.

While nothing is impossible, and as always one may hope for the industry’s sake that AT&T can pull its conversion off more towards software in some meaningful form, there have been many examples of the firm really not excelling from either an engineering or commercial standpoint including the following five items: 1) overwhelmed by the capacity demands when it initially became a supplier of Apple’s iPhone; 2) lack of penetration of its wireless transmission into certain medical facilities resulting in personnel needing to switch to another provider; 3) not even close to Verizon in terms of proactively planning for optical bandwidth growth on its backbone; 4) a reduction in flexibility when it comes to customer support with its Unified Communications Services 5) around the time of the bubble, the appearance of protecting a relatively weak AT&T Network Systems with its “good ole boys” — while pulling back on evaluating Ciena’s gear, which prevented a powerhouse merger with Tellabs (combining the technological prowess of both suppliers with the business acumen of the latter).

[written by Mark Lutkowitz]