AT&T cuts deeper and bigger


MSNBC/Reuters reports that AT&T is going to be making much bigger cutbacks in its consumer phone business. The Wall Street Journal has more details and adds,

The nation’s largest long-distance carrier by customers and revenue has begun notifying companies that provide it with marketing services, such as call centers, that it won’t be needing them, or will be sharply reducing the services it buys, these people said. Accenture Ltd. is one of the outsourcing vendors that has been informed of a cutback, these people said.

So very quick takeaways from this:

1. The UNE-P pricing pain may be more than most previously.
2. Great News for Baby Bells for AT&T is packing up and leaving.
3. Consumers will continue to be gouged forever.
4. Really bad news for Covad which had been counting on its partnership with AT&T.

What will AT&T do on the consumer side? Get as much money out of its existing UNE-P customers at least for much of 2004, and then refocus on its VoIP and MVNO wireless business. I think this is a way for the company to basically prop up the consumer operation as best as possible, while it shifts its entire focus on the business services. I have a feeling AT&T has little or no interest in consumer voice at all.

What history tells us is that may not be such a bad move. Remember all the hue and cry everyone made when IBM flipped the bird to the PC business. Well same here – AT&T will soon become the IBM of business networking services.

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