Telecoms giant AT&T Corp is pumping more than $750m into areas such as data center expansion, VPN management, and access technologies, as it aims to expand its services business.
Geoff Webster, VP of global business development at AT&T, told Computer Business Review that the sum represented more than double the amount that the comparable level of investment last year, and said that it would help the company ability to win major business outside its domestic US market.
The investment forms part of AT&T’s previously announced capital spending plan, and Webster explained that the $750m would go into two main areas: We will use it to enhance our services portfolio, and to expand our network reach, adding new endpoints in countries where we do not have a presence, and improving our coverage in countries where we are already present.
Specifically, AT&T plans to develop its range of virtual private network (VPN) and security services in areas such as applications management, remote monitoring, network-based firewalls, and IP conferencing and contact centers. The company also plans to increase its number of data centers from 32 to 38 by the end of the year, having recently inherited four facilities through the takeover of BellSouth and the $300m acquisition of hosting specialist USinternetworking last September.
AT&T also plans to extend the roll-out of access technologies such as Wi-Fi, DSL, Ethernet and satellite to help clients connect to its global network. And the fourth main target area for expansion is AT&T’s network itself, with the company planning to develop its coverage in markets such as Asia Pacific, the Middle East and Latin America, as well developed markets such as Canada, the UK, France and Germany.
AT&T does not have a consumer business outside the US, and instead targets Forbes 2,000 accounts AT&T under the AT&T Global Services banner. It has a number of direct sales executives selling direct, and it also sells through large systems integrators and vendor partners such as Cisco Systems.
Webster said that the company is aiming to win the type and scale of contract outside its native market that AT&T has recently won in the US. In February, it captured a $1bn deal with General Motors to manage its global voice and data network and supply VPN services, and won four telecoms services contracts together with Verizon to provide services to the State of California years worth a combined total of $350m.
However, he argues that AT&T already has enough scale outside the US for it to be considered an international player, citing the company’s four-year, $174m deal with electronics manufacturer Siemens AG to manage its networks outside Germany. He said: We would not have won the General Motors deal if we did not have the ability to deliver globally.
Webster said that the company’s main domestic competition comes from telecoms rival Verizon, while in Europe it goes head-to-head against BT Global Services and France Telecom’s Orange Business Services division. He said: The main battlefield is the WAN, but we do come up against other companies such as IBM in hosting and Vanco in VPN services.