The telecom industry is undergoing a radical transformation that is "like rebuilding an airplane in flight," said AT&T Chairman and CEO David Dorman at the Credit Suisse First Boston Media and Telecom Week conference in New York. Dorman argued that AT&T is best positioned as provider of choice in this new environment due to its scale, financial strength and industry leading brand, customer base and product portfolio.
Regarding the company's newly announced VoIP strategy for businesses and consumers, Dorman observed that "convergence is creating an increasingly complex operating environment for service providers, which must offer multiple protocol management and expertise -- and be able to transition legacy networks and systems to the leading edge without sacrificing current performance." He continued "....we're on the verge of a VoIP revolution. AT&T -- more so than others -- has the skills, scope and scale to effectively build the VoIP utility."
AT&T considers itself a "voice application service provider" that enables any application to work across any geography, said Dorman. "We intend to be the market leader in VoIP services"
Dorman laid out four layers of convergence that are transforming the business:
- Standalone services such as local and long distance voice are converging into bundled offers
- Circuit switched technologies are converging into packetized platforms
- Multiple legacy transport networks are converging into unified networks based on an IP core
- Multiple, manually intensive billing and provisioning systems are converging into unified, automated systems
AT&T has allocated $3 billion for CAPEX in 2004. The company plans to retire 270 legacy systems by 2005. Over 100 such systems were retired this year.
Dorman said business customers are "responding well" to an aggressive new pricing strategy introduced in November. AT&T is also looking forward to an improved economic and industry environment in 2004.
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