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
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

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
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.

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