Forget Ma Bell, think Ma Cell
AT&T's $81 billion Cell deal is all about wireless. When it happens, the
world of big-business telecom sales will never be the same.
By Owen Thomas, Business 2.0 Magazine
(Business 2.0 Magazine) -- AT&T's bid to acquire BellSouth has run into
a few snags lately, but make no mistake: The $81 billion dealwill happen
-- and when it does, the impact will be far bigger on corporate America
than on consumers.
This deal isn't about a return to Ma Bell, the telephone monolith that
was famously broken up two decades ago. It's about Ma Cell and the
future of wireless communication for businesses.
Both AT&T and BellSouth have been key players in the $100 billion
market for big-business telecom services. Together they just might be
unstoppable.
The future of connectivity
How so? Because consolidating control over their Cingular Wireless joint
venture will transform the mobile operator into a far more nimble
competitor.
But there's another reason: a new technology known as IMS. It promises
to cure the perennial IT headache of making sure that employees stay
connected and productive on the go. With IMS technology, CIOs won't
have to think about equipping employees with landlines and e-mail
pagers and calling cards and cell phones and laptop network
cards. They'll just buy connectivity, plain and simple.
Both Cingular and AT&T separately have invested heavily in IMS. "IMS
is where the industry is headed," says John Byrne, an analyst with
Technology Business Research. "It makes perfect sense for [those
parallel efforts] to be integrated."'
An AT&T spokesman declined comment for this story, citing the pending
merger. The deal's expected Federal Communications Commission approval
last week has been held up by last-minute conditions sought by some
regulators. But AT&T's past statements, analysts, and industry sources
paint a clear picture of what's ahead for the combined company and its
corporate customers.
Hanging up on separate networks
To be sure, IMS won't alleviate any IT migraines anytime soon. The
technology is somewhat complex: it promises to seamlessly route voice
and data over any network whether it's wired, wireless, 3G or Wi-Fi.
Ultimately the information will travel over the same secure backbone.
But Byrne, for one, thinks it will take a few years before engineers
work out all of the kinks.
IMS is just one factor driving the AT&T-BellSouth merger. The other is
the advantage of having their currently separate wired and wireless
phone networks under one roof.
Full control over a cellular network will enable AT&T to offer and
sell services far more quickly than when Cingular was a joint venture
-- and subject to the inevitable limits of two competitors trying to
work together.
Take AT&T's pending rollout of a citywide Wi-Fi network in Riverside,
Calif. Before the merger deal, a project like this could be seen as
competing with Cingular's 3G network and the partners could easily
have squabbled over it. Now AT&T can freely sell customers access to
either its 3G network or Wi-Fi hotspots - or both.
Indeed, expect to see AT&T selling business customers combination
phones that work on Cingular's cellular network, over corporate Wi-Fi
networks, and at AT&T-managed Wi-Fi hotspots.
It's a key advantage. AT&T archrival Verizon (Charts), which owns 55
percent of Verizon Wireless, doesn't have that freedom. It still has
to dicker with Verizon Wireless joint venture partner, U.K.-based
Vodafone (Charts), over who gets paid for what.
Rebirth of a salesman
AT&T will also have another advantage -- its large corporate
salesforce that's used to cultivating Fortune 500 customers and
selling packaged deals.
These salespeople have had to operate at arm's length with Cingular,
bringing in a Cingular representative to sell a deal that includes
wireless services. After it takes control of Cingular, AT&T
salespeople will be able to sell wireless directly to their existing
accounts.
"The fact that you even have to ask who owns the account points out
why it makes sense for the Cingular venture to go away and be brought
into AT&T," says Byrne.
And it's not just Cingular as a corporate entity that's set to
disappear: AT&T has said that the Cingular brand itself will fade
away.
Some consumers may miss the Cingular brand, which seemed younger and
hipper than AT&T. But for corporate customers, the seriousness and
solidity of the AT&T brand is more reassuring.
Who needs Cingular?
And as technological change makes the distinction between wired and
wireless connections less meaningful, it's not clear what value a
separate wireless brand would have in a few years anyway.
So goodbye and good riddance, Cingular. Getting rid of the separate
wireless brand -- and separate wireless technology -- is a great example
of the simplicity that the newly expanded AT&T promises. Here comes Ma
Cell: A network that's everywhere, and that you don't have to think
about. Ubiquity and stability.
When you think about it, that doesn't sound that different from the Ma
Bell of old.
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Owen Thomas, Business 2.0 (business@telecom-digest.org)