The telecommunications industry’s on-again, off-again interest in offering bundled services appears to be back on again as a pair of companies announced initiatives last week that could make it easier to offer customers both wireline and wireless telecommunications services.
AT&T Corp., which spun off its AT&T Wireless Services Inc. subsidiary in 2001 as part of a broad corporate restructuring plan, said it had reached an agreement with its former entity to resell branded AT&T Wireless service through a new communications bundle to consumers.
“This combined wireless and wireline calling plan will allow users to select the right phone for the right occasion,” said AT&T Chairman and Chief Executive Officer Dave Dorman. “Additionally, consumers no longer will have to contract with multiple vendors to get the services they want and need.”
AT&T added that the bundled offering, which will be launched in select markets this summer, is an example of the company’s intent to package communications, entertainment and e-commerce services jointly with strategic partners.
AT&T Wireless noted the agreement would provide the carrier with an additional, low-cost sales channel for its services and would enhance its financial goals.
“Our new agreement with AT&T will serve as a solid supplement to our principal marketing activities and will enable us to efficiently offer wireless service to some otherwise hard-to-reach customers,” explained John Zeglis, chairman and CEO of AT&T Wireless. “It supports an important strategic thrust for AT&T Wireless of attracting new customers in creatively cost-effective ways as we drive toward our goal of becoming free cash flow positive in 2003.”
Analysts noted that for AT&T Wireless, which has posted strong revenue growth since it was set free from its corporate parent, the agreement will provide the carrier with an additional marketing stream for attracting new customers. In addition, the resale agreement could eventually become a replacement for the carrier’s previous resell partner WorldCom Wireless, which at one point served approximately 600,000 customers on the AT&T Wireless network before exiting the business last summer.
While AT&T Wireless was hooking up with AT&T, Sprint Corp. said it has begun converting its circuit-switched telephone network to what it called “next-generation” packet network technology. The company explained that the planned migration of its 8 million lines to a packet system would improve network capabilities and allow it to introduce future products and services on a “seamless Sprint network.”
“A packet network lays the groundwork for services that customers haven’t even imagined yet,” said Mike Fuller, president of Sprint’s Local Telecommunications Division.
Industry observers point out that those service could include the ability for Sprint to offer flat-rate pricing plans that include both wireline and wireless service using Sprint PCS’ next-generation wireless network.
Sprint currently offers bundled telecommunications services, including local, long-distance, wireless and digital subscriber line options, in select markets.
