AT&T targets 1M business customers with Project VIP, says integrated wireline-wireless is key

August 13, 2013 | By Sean Buckley

AT&T (NYSE: T) is finding that what business customers want is a provider that can solve their problems by bringing them an integrated wireless and wireline solution.

Geisse (Image source: AT&T)

"The key differentiator is our ability to integrate mobility with all of our solutions," said Andy Geisse, CEO of AT&T Business Solutions, during the Oppenheimer Technology, Internet & Communications Conference. "When I am talking to a CIO or a CEO it doesn't matter what technology you have; it's more of a question of how do you solve and fix my problem?"

One example where the provider was able to bring a solution was at Amtrak, which wanted to implement an electronic ticketing process for its patrons using iPhones and other mobile devices.

"To put that solution together, it took not just normal wireless service," Geisse said. "It took finding the right sled to go on that to be able to scan credit cards; it took combining Wi-Fi, cellular and satellite capabilities; and it took a VPN because they wanted to put in our cloud-based service and communicate it back to their data center through a VPN."

AT&T Business is focusing on three strategies to drive business services growth: expanding its core wireline and wireless network platforms including fiber and IP broadband and wireless LTE; differentiating with platforms like cloud; and delivering integrated solutions.

The provider plans to bring fiber to 1 million additional business customer locations as part of its Project VIP initiative, which will serve as the base to deliver these solutions.

"The fiber buildout is critical because it gives us a whole new market to go after, and we're already ahead of the build there," Geisse said. "We expect to pass 250,000 business locations by the end of the year, and it's a base for us to build other things on top."  

Leveraging its mix of fiber-based and wireless-based network platforms, AT&T is offering a mix of cloud-based services and integrated solutions such as mobility and collaboration.

Complementing its own cloud efforts, AT&T is working with other partners such as IBM and CSC to help business customers to get the cost benefits of cloud services while maintaining security.
"With IBM we opened up the control plane of our network and they integrated their cloud capability to it," Geisse said. "If you're a CIO and you're on AT&T's VPN capability, their cloud capability is one more node off your network."

As its customers look to improve productivity, the provider is getting more requests for solutions that integrate wireless and wireline capabilities.

In addition to Amtrak, AT&T is seeing demand for integrated services with a range of other large business and government customers such as the U.S. Postal Service (USPS).

USPS recently awarded AT&T Federal two contracts to provide VPN connectivity services to USPS' retail and support locations throughout its 50-state U.S. footprint and Managed Trusted Internet Protocol Service (MTIPS).
"Part of the deployment was a normal Virtual Private Network connecting 9,500 of their post offices," Geisse said. "The other part of it was they wanted to move to mobility in terms of scanning packages, track(ing) those packages, but do it in such a way to not have to go out and buy computers and smart phones for everyone."
The telco's move to offer integrated mobile and wireline solutions to businesses is making sizeable contributions to its business services revenue mix.

In 2012, strategic business services, which consist of wireline services such as Ethernet, grew over 15 percent and are approaching 25 percent of total revenues in business wireline. Looking forward to 2015, it expects that these segments will make up two-thirds of their revenue.  

During Q2 2013, AT&T's strategic business services were $2.1 billion, up 15 percent year-over-year.
Geisse said the carrier "can continue to grow by not just by putting that base platform in but start growing on top of that other things, including security, solution providers, and mobility solutions."