AT&T Says Let The Post-Merger Innovation Commence: Bring On The Bundles

from the dead-horse dept

Tue, Jan 2nd 2007 11:38am — Carlo Longino

While the real value of the concessions AT&T and BellSouth made to the FCC to get their merger approved is debated, the company's discussing its post-merger strategy. Chairman and CEO Ed Whitacre says that the real reason for the merger was to consolidate ownership of Cingular -- something we already knew -- and that the new AT&T is "about to become a company with wireless at its heart". So what's this supposedly wireless company's key offering going to be? That old standby, bundles. But AT&T is pitching something new: it says that consumers will get discounts just for buying fixed broadband and mobile phone service from it, instead of insisting on them adding landline telephone service into the mix. That sounds great from a PR angle, since the company can say it's no longer worried about cannibalizing its landline revenues, and that it's positioning itself as the operator of the future and so on. But when it's been so resistant to naked DSL and offered such a paltry cost savings on it, this seems like a rather hollow statement, particularly when the naked DSL they've promised to offer doesn't sound very attractive. Operators tend to act like bundles are this huge improvement, and will allow them to offer all sorts of new services, but rarely is that the case. Cingular and its owners, even without this bundling that Whitacre now says is possible, have been able to offer new services only to people who subscribed to service from both of them, while in many instances the bundle doesn't live up to consumer expectations and serves merely to subsidize the existence of undesirable services. But have no fear, the bundle isn't the new AT&T's only innovation: Whitacre also says advertising will be very important to the company. It says it's moving carefully for fear of upsetting users with intrusive ads, but given some of the ideas its execs have mentioned, that seems like another hollow statement as well.

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7 Comments

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Again, 2 Jan 2007 @ 1:01pm

Those who fail to learn from history are doomed to repeat it.
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rijit (profile), 2 Jan 2007 @ 1:04pm

Bundles...
AT&T advertises heavily in East Texas on the radio and one of their "benefits" of having AT&T be your content provider is you can "bundle" your entertainment bill and telephone bill in one payment to save you money, you know that extra stamp you buy to mail that second bill or the time you use to go to that second website to pay online.
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dataGuy, 2 Jan 2007 @ 1:13pm

Does anyone else read the name of AT&T's Chairman and CEO as "Ed Wiseacre"? Seems more appropriate to me...
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chris (profile), 2 Jan 2007 @ 1:23pm

just about the only reason to live in cincinnati
is the fact that they are served by the only remaining RBOC... cincinnati bell.

and while cincy bell isn't forthcoming with naked DSL like AT&T claims to be... they have heard the word from wireless carriers, digital phone services, cable internet and VOIP and have cut their prices and boosted transfer rates to meet the challenge.

granted, some of their radio and billboard ads sound like political attack ads but old telco habits die hard.
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Leo Klein, 2 Jan 2007 @ 1:30pm

All Ads All the Time
Can't wait till I get that 'All Ads All the Time' Internet account -- at a huge discount of a few bucks a month (plus my sanity). It's not like there'll be a choice but if you go with "premium", you'll be able to turn the things off after the first ten minutes.

Of course, by then, we'll have moved on to a newer form of communication that'll prove difficult for AT&T to bundle, namely, banging on drums. Then again, who knows.
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Tyshaun, 2 Jan 2007 @ 1:36pm

Re: just about the only reason to live in cincinna
is the fact that they are served by the only remaining RBOC... cincinnati bell.

Actually, Cincinnatti bell was never considered an RBOC
http://en.wikipedia.org/wiki/Regional_Bell_Operating_Company#Cincinnati_Bell
Not really relevent to your main point, just a side thought.
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Jack, 3 Jan 2007 @ 4:12am

Get ready for another telecom monopoly!
In 1984 when Judge John Sirica broke up the AT&T owned Bell System those on the inside became millionaires. Now, 20 years later, AT&T is merging with Bell South (with court approval). You can depend on AT&T going after the other 'Baby Bells' and within 20 years we'll have another AT&T telecom monopoly. AT&T has learned the lessons of how to break up a monopoly while making millionaires of those in the know. I can readily see this becoming a 20 year cycle of break up, reorganize, merge and dominate the market. And the losers in this cycle will be the ratepayers. As always.
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