Dorman tells of AT&T's advances in VoIP, wireless and alternative access


AUSTIN, Texas -/May 20, 2004 Wi-Fi Technology News/- AT&T Chairman and CEO David W. Dorman, addressing shareowners at the company's 119th Annual Meeting yesterday, said AT&T is enriching its array of services and choices for consumers and businesses to assure the company's position of industry leadership for years to come.

Speaking at the Austin Convention Center here, Dorman cited AT&T's continued technological and strategic progress while transforming into the industry's leader in Internet Protocol (IP) services and continuing to innovate for businesses and consumers.

"We're confident that we have the right strategy in place to position this company for leadership and success over the long-term," Dorman said. "We're on the right path, and we fully intend to stay the course."

The most recent example: AT&T's announcement Tuesday that it has chosen Sprint as a wireless network supplier, enabling AT&T to offer wireless voice and data services to consumers and businesses nationwide. This agreement will help AT&T compete and give customers what they increasingly desire -- mobility -- while AT&T also will gain a unique opportunity to build a wireless business quickly via the power and reach of its brand and an existing customer base of more than 30 million.

AT&T has been aggressively expanding its business model beyond long distance, Dorman said. The company is investing to create a single global IP network to better serve enterprise and consumer customers. The delivery of new and advanced application services over AT&T's core IP backbone remains central to the company's customer strategy, Dorman said.

"As our new advertising campaign asserts, AT&T has staked its claim as `The World's Networking Company SM,' " Dorman said. "We're a truly global technology leader, with a rich heritage of innovation that continues to change the face of communications."

This ability is highlighted in AT&T's aggressive rollout of Voice over Internet Protocol (VoIP) services for businesses and consumers. AT&T's CallVantage consumer VoIP service has been launched in 34 markets and remains on track to be in 100 markets nationwide by the end of 2004. The company reiterated its pledge to have at least 1 million business and consumer VoIP users by year-end 2005.

Dorman said that VoIP, with its rich features, could be the "killer application" that drives broadband penetration well beyond its current levels. The company also has expanded the depth and breadth of its VoIP offerings to offer a full solution set for enterprises, call centers, small businesses and teleworkers, Dorman said.

AT&T in coming months expects to add wireless service for customers at a time when demand for mobile voice and data services continues to grow. Providing service as a "mobile virtual network operator," AT&T's strategy promises to go far beyond a typical resale agreement, allowing the company to be much more in control of its customer experience and cost structure. The strategy also allows the company to once again capitalize on the power of its brand in the wireless marketplace.

As the integration of cell phones and wireless fidelity (Wi-Fi) technology improves, AT&T plans to offer handsets allowing customers to make VoIP calls over broadband connections in homes and to roam on the wireless network when away from home, even globally, Dorman said. VoIP combined with Wi-Fi will provide a "compelling alternative to today's communications options," he said.

Indeed, Dorman stressed that AT&T is committed to finding alternatives to traditional means of reaching local phone and broadband customers, especially as the regional Bell phone companies remain reluctant suppliers of wholesale access to local networks. He said AT&T is encouraged by tests it has conducted on broadband over power lines, as well as other wireless and IP solutions, and expects viable options to be available within a few years. AT&T is committed to reducing the roughly $11 billion it pays in annual access and other connection costs to Bells and other carriers, Dorman said.

"We do not intend to remain dependent on the Bell infrastructure to provide access to local customers or to provide broadband access to the AT&T IP network," Dorman explained.

Although AT&T does not view UNE-P as a long-term access solution, the availability of UNE-P over the short term -- at economically feasible rates -- remains an essential bridge to the future, allowing AT&T to build and maintain the customer base it needs to invest in its own innovative services and facilities, Dorman said.

AT&T has welcomed the opportunity to negotiate fair, economically viable, long-term wholesale agreements with the Bell companies. Last month, AT&T proposed a plan to transition AT&T away from Bell company facilities, an offer that was summarily dismissed by the Bells, Dorman noted. In light of the lack of progress during government-mandated negotiations, AT&T last week asked the Bell companies to agree to a binding arbitration process to establish long-term commercial agreements and preserve competition.

In the meantime, AT&T will continue to transform its revenue base with leading-edge services and solutions, delight customers and enhance its cost structure. "The difficult industry situation masks much of the significant progress we have made in improving AT&T's business processes and expanding into new services," Dorman said.

About AT&T
For more than 125 years, AT&T (NYSE "T") has been known for unparalleled quality and reliability in communications. Backed by the research and development capabilities of AT&T Labs, the company is a global leader in local, long distance, Internet and transaction-based voice and data services.