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AT&T Signs Degussa to Worldwide IP VPN

UPDATED: Specialty chemicals manufacturer Degussa AG signed a five-year, $45 million contract with AT&T to put its worldwide network under one roof, officials announced Wednesday.

With the contract in place, the Dusseldorf, Germany-based multinational will connect its entire network of 45,000 employees, 63 production facilities and 327 offices worldwide under AT&T's Multiprotocol Label Switching-based virtual private network (VPN).

Besides allowing AT&T to manage much of its network transport and router operations, the IP VPN service offers usage-based billing (in addition to flat-rate billing) and management, as well as faster and more secure network traffic speeds, as traffic is routed through AT&T's own backbone.

"We anticipate significant improvements in reducing our network complexity, as well as further progress on the security side," Lucas Kuttler, Degussa CIO, said in a statement. "From a business and cost point of view, the reduced complexity will lead us, mid-term, to cost reduction while maintaining current standards."

The contract, he continued, will also allow the company to more easily add new IT applications down the road to support its continuing operations in the chemical industry.

AT&T's latest customer is another feather in the cap for the company's transformation from a traditional long-distance phone carrier to a worldwide IP-based service provider for corporations and business.

Almost a year to the date, AT&T officials unveiled its managed IP VPN offering to the world as part of those transformation efforts. Those efforts originally began in the 90s when Ma Bell starting investing billions in IP to make way for next-generation voice services like Voice over IP .

AT&T's Degussa deal is one of several MPLS-based contracts it has signed this year. The company has announced contracts with engineering services firm URS Corp., agricultural processing company Archer Daniels, Fisher & Payel Appliances of New Zealand and Parisian manufacturing firm St. Gobain.

Officials wouldn't comment on the overall success of its program in terms of customer base or revenues since its launch last year, but said the company continues to gain market share in selling IP services to a wide range of industries around the world.

"We have transformed ourselves into the worlds leading global networking company, offering innovative IP services that help businesses compete more effectively," said Karyn Price, an AT&T spokeswoman.

"What has not changed, and what distinguishes us in this market, is the formidable position we hold with our enterprise customer base. With our industry-leading networking capabilities, employees, AT&T Labs expertise, powerful brand and financial strength, we are widening the gap between our competitors and us."