June 14, 2008

AT&T Offers New Brand of Telephone: U-Verse Voice to Launch Monday

By George Thomas, The Akron Beacon Journal, Ohio

Jun. 14--In a move certain to rock the telecommunications world, AT&T announced it will begin offering phone service to the Akron, Canton and Cleveland areas.

Yeah, that's right. Phone service.

Don't do a double take. The company whose name is synonymous with the telephone is looking to the future, and it sees a changing landscape that doesn't include traditional, wiredlandlines. It also views a current reality where cable giants such as Time Warner offer their own telephone service.

The response: Build what it hopes will be a better service using the AT&T brand and new video technology to attract customers. U-verse Please see AT&T, A8

Continued from Page A1 Voice, a voice over Internet system, will be made available to customers of U-verse, AT&T's answer to cable television, beginning Monday.

How seriously is the company taking this? "Where there is U-verse, U-verse Voice will be our premium telephone service," said Bob Beasley, a spokesman for AT&T.

What's driving the change? Cost and reality.

"The main reason from the operator's perspective is that they're going to save a lot of money," said Seth Wallis-Jones, a senior research analyst for Global Insight, a marketing research firm. "By eliminating the circuit switched equipment they have at the moment, it will make serious savings on the infrastructure costs."

Given what's happening in the industry, it makes sense for AT&T to wean itself off the copper lines that make up the phone system.

According to a survey by the National Center for Health Statistics, the number of landlines will decline by 15.8 percent this year. Currently, one in six households has no landline.

Where are those users going? Some, especially younger people, just use their cell phones. But plenty are discovering the benefits of migrating to Internet telephone service. Subscriptions to Internet telephones are expected to rise 21.2 percent over 2007, according to market research firm IBISWorld. About 16.6 million users are projected to switch.

Notable features

It's easy to see why AT&T, a company that reportedly has more wireless subscribers than landline users, would want a piece of that pie. And there's plenty to tempt those who have interest in switching their home phone service. U-verse Voice, which costs $40 a month for unlimited local and long distance or $30 for 1,000 minutes a month, isn't just a phone service. It's designed to work seamlessly with the U-verse TV service and, for those who are AT&T wireless customers, with cell phones. Among the more notable features:

--Locate me -- A nugget that allows you to set up your phone to ring to up to four other numbers simultaneously along with your home phone.

--Click to call -- From a channel on the U-verse service, users can see their call history -- incoming and outgoing calls -- and, using the remote, click on it and dial. The home phone rings, you pick up and the call connects.

--An online mail box -- Users can access all of their voice-mail messages online via any phone line or personal computer. Voice-mail can be set up to forward to an e-mail address as an audio file.

In addition, whereas home alarm systems and Internet phone services don't usually play nice with one another, AT&T says that problem has been licked for most systems.

The system also includes a battery backup in case of a power interruption. And because the phone service is channeled through AT&T's network as opposed to the general Internet, access to emergency 911 service is no longer an issue.

Benefits of bundling

But why should anyone bother with any of this? The operative word in communications products today: bundling -- that is, Internet, video and phone service on one bill.

"From what I'm seeing, consumers are getting some savings. It's all part of a movement where you sort of triple play services where you get voice and video all over the same network," Wallis-Jones said. "So consumers are getting savings from bundling."

AT&T has been building toward bundling since the launch of U-verse and the phone service now puts its on the same playing field in Northeast Ohio as Time Warner, which has offered bundling for several years. It also provides competition for the communications dollar, something that the area's dominant cable company welcomes.

"Bring it on," said Time Warner spokesman Bill Jasso. "We made the competition get into the TV business. That's how well we're doing [with telephone service]."

But the competition is having an effect on how companies do business. He likened what's happening to rearranging deck chairs. "We're offering different flavors. Have we reduced the price of our all-you-can eat gazillion channels, Internet and phone? No, but what we have offered is smaller packages [such as a current $74.95 promotion] at smaller prices."

It's clear from AT&T's latest move, more flavors will be in the offing for potential customers, but the company will have to see whether they're willing to put their money where their mouths are.

George M. Thomas can be reached at [email protected] Read his blog at http://www.ohiomm.com/blogs/sportsblitz/.


To see more of the Akron Beacon Journal, or to subscribe to the newspaper, go to http://www.ohio.com.

Copyright (c) 2008, The Akron Beacon Journal, Ohio

Distributed by McClatchy-Tribune Information Services.

For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.