AT&T Wireless Drops Fixed Wireless

After four years in the business, Ma Bell’s former wireless arm has decided
to hang up the spurs on its failing fixed wireless service, a move that
strands 47,000 of its customers, displaces its entire fixed wireless
division staff and costs the company more than $1 billion.

Mike DiGioia, AT&T Wireless spokesperson, said the transition for both
customers and employees will be gradual, not the systemwide shutdown of
services that have become commonplace for failing broadband providers.

“Right now, we are planning a phased exit over the next six months, we’re
not going to just turn off the network on Monday,” DiGioia said. “We plan
on working with the local exchange carriers (LECs) in the area to work with
our customers to find a solution.”

Customers have not been notified of the expected shutdown, but DiGioia
expects letters to go out to customers in the next couple months, either
via email or phone. “We’re going to do everything we can to make sure
there’s no interruption in their service,” he said.

Although some of its 1,000 employees will get laid off as a
result of the shutdown, DiGioia expects most will find employment somewhere
else with AT&T Wireless. Those that don’t, he said, will get help finding
a job externally.

When AT&T announced its breakup into four separate entities last year,
fixed wireless was kept on the AT&T Wireless books. Officials at the time
were confident the division would remain if it could meet key financial
targets, something it was obviously unable to do.

Part of the problem was that many executives at AT&T didn’t know how to
market the evolving technology. Fixed wireless, which has gained in
popularity only in recent years, is a high-speed alternative to digital
subscriber line (DSL) and cable Internet services.

AT&T owns DSL and cable properties throughout the U.S. — cable through its
ownership of TCI and Media One last year, and DSL through its buyout
of NorthPoint assets
earlier this year.

Fixed wireless never really found a home at AT&T, however. A spokesperson
at AT&T Broadband made clear the fact that fixed wireless was never part of
its Internet package; never was and never will, despite the fact that fixed
wireless is a last-mile broadband Internet solution like DSL and cable.

Instead, it was lumped in with AT&T Wireless, a company that’s had problems
of its own since going public. The company has been struggling to
generate traction with the American public to its 2.5G digital mobile phone
service against competitors like Verizon Wireless and Cingular.

Executives certainly didn’t have the time to spend time on a technology
that must have seemed like competition to its expanding product line of
Internet-ready mobile phones.

John Zeglis, AT&T Wireless chairman and chief executive
officer, said it was the right move to make to keep its business profitable.

“This is the right decision, given our strategic priorities and the
additional capital our fixed wireless business would require going
forward,” Zeglis said. “We are committed to a phased exit that will ensure
a high level of support for affected customers. We’ll work closely with
customers during this transition period. And, we’ll offer affected
employees support in finding other employment, inside or outside our company.”
AT&T Wireless plans on taking the $1.3 billion hit in the fourth-quarter of
2001.

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