RealTime IT News

AT&T Eyes Speedy VPNs

A day after learning that its second quarter profits rose 18 percent, AT&T Corp. Wednesday celebrated with a strategy to increase the speed of networks.

AT&T is enabling businesses to connect their networks to AT&T Internet data centers. The telco will offer enterprises who wish to revamp the firepower of their DSL Internet connections the ability to create IPSec-compliant broadband virtual private networks.

The broadband service allows users to link to and share applications via a centrally located managed VPN gateway, which acts as the termination point for multiple IPSec tunnels. The AT&T Broadband VPN service will be availabile in September.

Also, for businesses that want to establish trading communities and secure extranets, AT&T has created a public key infrastructure that will allow business partners, suppliers and vendors using multiple carriers to exchange secure digital certificates.

Digital certificates are used to authenticate a user's identity when connecting businesses and their computers to the Internet. AT&T is building a PKI to generate, maintain, and manage the digital certificates used for this service. AT&T plans to offer PKI services in the third quarter of 2000. Pricing will be announced upon availability.

Industry analysts said AT&T is in good position to dominate the IP-based VPNs. Eric Hindin, vice president at The Yankee Group, was extremely bullish on the telco's maneuvers.

"A market renaissance for IP VPNs is just around the corner as service providers overcome technical and market obstacles that have made IVPN implementation and selection difficult," Hindin said.

"Based largely on the strength of its IP-Enabled Frame Relay service, we expect AT&T to take over the top overall IVPN market-share position by the end of 2000. The service is extremely popular with existing Frame Relay customers and has sent AT&T's Frame Relay and IVPN competitors scrambling to build similar services."

And AT&T does not list slouches for competitors, with Sprint Corp., WorldCom Inc. and Infonet leading the way.

Last week, Infonet said it will launch its Global Connect USA service in August. This strategic build-out enables the company to provide expanded U.S. coverage and fixed price T1 customer premise access across all major metropolitan U.S. business centers.

This methodology provides clients the ability to define their VPNs in accordance with assigned network priorities.

Wednesday's news and Tuesday's earnings report bode well for AT&T's reach into the Internet sector. AT&T Chairman and Chief Executive Officer C. Michael Armstrong said the company, in its efforts to make up for dwindling long-distance sales and sluggish business service revenue growth, has cut costs by more than $1 billion this year and heads toward its goal of $2 billion in reductions by year's end.

"We continue to cut costs in our legacy long distance voice businesses so we can invest in our high-growth businesses," Armstrong said.

The telco's wireless group has seen tremendous growth, boasting second quarter revenues of $2.48 billion, an increase of 32 percent over $1.88 billion in the year-ago quarter. Much of this gain is attributed to subscriber growth of nearly 34 percent and higher average revenue per user.