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AT&T CEO Pledges New Era of Telecom

AT&T's chief executive pledged to continue building out a "new era" of networking and telecommunications services by one of the nation's oldest telcos, while tending its balance sheet in order to trim debt.

During its 118th annual shareholder meeting Wednesday, AT&T chairman and CEO David Dorman said the company would end the year with net debt at $10 billion, $2 billion lower than when it began the year. And he pledged to continue building out cutting-edge networking and technology services offered by AT&T's business and consumer divisions.

The meeting comes as the chairman moves to shore up investor confidence in the company, whose stock price has been under pressure for months, while pushing it in new technology directions as its traditional landline revenues are eroded by wireless competitors.

On the business side, Dorman said the company's plans are to continue expanding its product mix and building next-generation networking technology that enables customers' ability to optimize their investments in information technology.

He said AT&T's implementation of a single global IP network is a fundamental underpinning of corporate customers' ability to transform their internal business processes, and are part of AT&T's evolution beyond its historical role as a telecom services provider, to a strategic partner providing cutting-edge networking technologies.

To that end, Dorman highlighted some of the company's initiatives behind the effort, including its recently-announced plans to invest $500 million on business improvements. The plan, the company said earlier this month, will encompass a range of billing, services and networking improvements, including providing Wi-Fi hotspots that would enable corporate customers to access their company intranets while they are in hotels and airports across the country.

The half billion investment is also about improving the customer experience, officials said, such as simplifying contracts, slashing provisioning time, improving billing accuracy, rolling out powerful electronic servicing capabilities, and linking customers' computers directly into AT&T's network-support systems.

Since the company sold off its broadband division to number one cable company Comcast , a deal that was completed in November of 2002, AT&T has moved aggressively to upgrade its business networking and hosting services for major business clients. In addition, as major backbone providers such as Global Crossing and WorldCom slid into bankruptcy during the past two years, AT&T has enjoyed what many analysts call a "flight to quality" as jittery customers returned to AT&T's fold when their own providers ran into financial difficulties.

Dorman's comments reflected those realities, as well as AT&T's own efforts to work through a difficult technology spending environment that has hit every major networking and systems vendor.

"From an operational standpoint, the challenges of the last year and the downturn in the industry overall have made AT&T a better company. We have become more focused and more efficient -- improving processes and setting a very specific, simplified vision for our future," Dorman said in prepared remarks ahead of the meeting. "We are continuing with a sustained investment in our business that is projected to be four times greater than that of our two largest competitors combined."

For example, AT&T just announced a new range of managed security services for business customers and government agencies that assess vulnerabilities, protect against unauthorized access, detect attacks and respond to security vulnerabilities across their networks.

The services are dubbed AT&T Network-Based Firewall Service, AT&T Enhanced Managed Intrusion Detection Service and AT&T Application Firewall Service.

In another new networking initiative, AT&T also launched a new business continuity service, called StorageConnect, which rolled out in late May. That service, as previously reported offers managed, multi-location storage transport to help customers keep vital information on tap in various places.

For example, AT&T said, if one network is compromised, StorageConnect would pipe storage area network (SAN) applications between their premises and/or AT&T Internet Data Centers (IDCs) for safekeeping.

On the consumer side, AT&T is increasingly bundling local and long-distance services in about 11 markets around the nation, and also plans to offer single-billing to long distance and wireless customers as well. The company said it expects to offer bundled services to consumers in as many as 22 markets by year-end.