AT&T Makes Wireless a Top Priority
By Sanford Nowlin, San Antonio Express-News
Jan. 3–Phone giant AT&T Inc. — on the heels of its $86 billion purchase of BellSouth Corp. — plans a more aggressive push of mobile communications services now that it has full control of Cingular Wireless, the cellular company it previously co-owned with BellSouth.
With full ownership of Cingular, the nation’s biggest wireless provider, San Antonio-based AT&T will begin offering new cellular services to corporate customers and selling ads on its phones to boost revenues, the Wall Street Journal reported Tuesday.
The company, analysts add, also is in a better position to launch services that blur the line between wireless and land- line telephony and to offer customers deep discounts on their bills if they bundle cellular service with its landline, video and broadband Internet offerings.
“At this point, wireless is really the growth engine for the whole AT&T organization,” said Roger Entner, wireless analyst for London-based Ovum.
An AT&T spokesman declined immediate comment on the Journal story, saying the company — which closed its BellSouth purchase Friday — isn’t ready to discuss its wireless plans in detail.
Pumping up its wireless business has become vital for AT&T because some landline customers are switching to cable companies such as Time Warner for phone service or solely relying on their mobile phones. In contrast to AT&T’s sagging landline business, Cingular had a net subscriber gain of 1.4 million for the third quarter, and its number of subscriber turnovers was down 50 percent from a year earlier.
AT&T is expected to swap out the Cingular name later this month to give the company a unified brand for all its services. It won’t use “wireless” or “mobile” as part of the name of the cellular division, AT&T CEO Edward E. Whitacre Jr. said during an interview Friday with the Express-News.
“We’re just going to call it AT&T,” he said. “No modifier.” The company will launch an ad campaign this month unveiling the new brand.
AT&T is eager to provide customers with wireless and landline phone, Internet and video services bundled on a single bill so it can compete with cable companies that are working to do the same.
The company offers U-verse, its cablelike TV service, in San Antonio and 10 other markets, and it also resells EchoStar Communications Inc.’s Dish Network. The company Tuesday offered 12 months of free Dish Network service to customers who take its local and long-distance services, fast DSL Internet service, and commit to a 24-month contract.
Back on the wireless side, AT&T is testing cell phones that can run on Wi-Fi networks when at home, then switch to cellular coverage when the customer travels, according to the Wall Street Journal. That, analysts said, could cut customers’ mobile phone bills and allow them better reception at home.
“When you just have one company in charge instead of a senior partner and a junior partner, it’s much easier to roll out new services,” Ovum’s Entner said. “One guy says jump, and you jump.” The Journal also reported that AT&T would begin selling advertising on mobile phones this year. The company would be able to sell customers ads that run across its cell phones, its high-speed Internet service and U-verse. AT&T could generate several billion dollars in ad sales each year for the next five years, the Journal reported, citing company officials.
AT&T competitor Sprint Nextel Corp. already does some advertising on its mobile content, and Verizon Wireless has said it will do the same early this year.
Analysts said AT&T’s full control of its wireless destiny also would help it ink lucrative contracts with big corporate clients. Already, the company has wireless deals with all of the Fortune 1000 companies, and it stands to expand its sales to them as it rolls out new services that let employees switch effortlessly between their wireless handsets and the phones on their desks.
Expenditures on technology that blends wireless and landline will rise to $80 billion over the next five years, according to Frost & Sullivan research.
“What businesses want from their carriers is integration of wireless and landline,” said Eduardo Kibel, analyst for Frost & Sullivan in Toronto. “They want to reduce costs.”
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