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SBC, Cisco Form Broadband Team

SBC Communications Inc. and Cisco Systems Inc. Wednesday formed a strategic marketing and sales alliance to accelerate delivery of open-standard broadband services.

Through the multi-billion-dollar agreement, SBC (SBC) tags Cisco (CSCO) as its preferred provider of data networking equipment. SBC's network currently connects 60 million access lines to 36 million customers nationwide.

As a part of the joint marketing and sales efforts, SBC plans to enhance its coffers by packaging Cisco equipment along with its advanced voice, broadband data and network integration services. The ability to bundle broadband equipment and services gives SBC and Cisco an edge in supplying the demand for end-to-end network solutions.

The SBC-Cisco alliance includes a series of joint research and product development activities that are designed to help both companies meet growing customer demand for emerging data and Internet Protocol services.

Financial terms of the alliance were not disclosed. The deal is non-exclusive and applies to SBC's service offerings in the continental United States.

Edward E. Whitacre Jr., SBC chairman and chief executive officer, said joining with Cisco brings it closer to becoming the only communications company our customers will ever need and allows SBC to deliver top-line revenue growth.

"Our goal is to provide customers with end-to-end, customized packages of advanced voice, broadband data and network integration services on a global scale through one of the most efficient, flexible, scalable and future-proof networks in the world," Whitacre said.

John T. Chambers, Cisco chairman and chief executive officer, said today's Internet economy forces companies to combine individual strengths to create joint value for mutual customers.

"Cisco and SBC's combined expertise in data communications and networking will give our customers access to an ecosystem of infrastructure and service partners, allowing them to compete more effectively," Chambers said.

The alliance is a natural progression of a long-standing relationship between the two companies. It more closely unites SBC's broadband data capabilities and service area with Cisco's data networking, IP and carrier-grade networking infrastructure expertise.

The deal is designed to help both companies to achieve their growth objectives in the data, Internet and e-commerce space. Over the next three years, SBC forecasts that its data revenues will double, growing at a compound annual growth rate of more than 30 percent. SBC already serves more than 100,000 customers with broadband networking services and more than 60,000 customers with e-commerce and Web-hosting applications.

SBC's Project Pronto, a $6 billion initiative to make DSL and other broadband-powered services available to 80 percent of its wireline customers by 2002 required a firm alliance with a networking specialist to work. The alliance with Cisco will accelerate the convergence of SBC's voice and data backbone systems into a next-generation, packet-switched platform.

By working with Cisco, SBC takes another step toward restructuring its network to support IP-based services. SBC will rely on Cisco for its Digital Subscriber Line, virtual private network, virtual point-of-presence dial access service, broadband capabilities gateway, and asynchronous transfer mode services.

Kitty Weldon, Yankee Group program manager, said the alliance is a unique collaboration between two premier companies that together can address today's customer demand for end-to-end managed services and connectivity solutions.