AT&T the Sleeping Giant Awakens to blitzkrieg the VoIP market

Tom Keating : VoIP & Gadgets Blog
Randy Savicky
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AT&T the Sleeping Giant Awakens to blitzkrieg the VoIP market

So every industry pundit is claiming that AT&T has surrendered to the Baby Bells, but I know better.

Here are some headlines:
AT&T surrenders fight for home telephone services
AT&T Gives Up on Consumer Market
AT&T rings in a new business strategy

"AT&T last month said that it would stop promoting its local and long-distance services to consumers, marking the end of an era for the company that once served virtually every U.S. home. AT&T plans to focus exclusively on big business customers, which account for 75% of overall revenue. The strategy is expected to save AT&T about $1 billion annually.

Dorman's decision to walk — make that run — away from AT&T's legacy long-distance business, a bedrock of the company since its formation in 1885, grabbed headlines. It also caused chortling among the regional Bell phone companies."

I should mention that Verizon, is going after AT&T customers with full-page ads stating "Some phone companies don't think you're worth it. We do."

Do you remember when Microsoft did not realize the potential of the browser, letting Netscape have a huge lead before Microsoft finally realized their gaff, refocused, and then caught and surpassed Netscape. Well, many people believe that AT&T has repeated history by not seeing the huge potential for VoIP and by letting young VoIP upstarts like Vonage take slices of their pie.

I don't see it. I think AT&T knew all along that VoIP was going to happen sooner or later. They purposely did not launch a VoIP service until recently for a very good reason. Why would AT&T, a multi-billion dollar company want to help propogate VoIP and make it mainstream when they know it would reduce the average per-minute rate and hence reduce their margins?

It's so easy for us to want to believe that AT&T repeated Microsoft's huge mistake. After all, we enjoy watching the mighty fall and we enjoy watching an underdog win. But I don't think AT&T was taken off guard by VoIP as many would have you believe. Nope, I believe AT&T was just been planning and waiting for the right timing to launch their "VoIP attack".

So do I believe AT&T retreating and surrendering the consumer space as the aforementioned story links above claim? No friggin way. AT&T is going around the "back door" to offer local and long-distance to consumers using VoIP technology and thus avoiding the spaghetti of telecom regulations (unless FCC Chairman Michael Powell decides to regulate VoIP). Let me give you an AT&T quote: "As a result of recent changes in regulatory policy governing local telephone service, AT&T will no longer be competing for residential local and standalone long distance customers." AT&T was essentially getting pressured by rising wholesale prices it must pay for local telephone connections. It was no longer cost economical for AT&T to do business "the old way". So AT&T is taking a huge gamble (a multi-billion dollar gamble - boy I wish I had those kind of chips to play) on VoIP to cut on their costs and increase their margins.

Even if AT&T was surprised or taken aback by the explosion of VoIP, if I may borrow a quote, "I fear all we have done is to awaken a sleeping giant..." Have the VoIP players woken the sleeping AT&T giant? I'm afraid it may be so.

As proof that AT&T is going "full-out gang-busters attack mode" gunning for the VoIP market, I have a "scoop" that AT&T is launching a media blitz during the Olympics with three commercials evangelizing VoIP and promoting AT&T CallVantage, a broadband VoIP product that competes with the likes of Vonage, Packet8, Lingo, BroadCom, VoicePulse, etc. I was able to get some "pre-release copies" of the Olympic commercials in MPEG and Quicktime format.

You can download AT&T CallVantage's three commercials below, but before you download them, here are some quotes from the main Anthem commercial and my comments:

AT&T Anthem commercial quotes:

-"It's based on a new technology called VoIP" Yeah, it's really new. Uh, Internet Telephony Magazine has been around since 1998 (6 years). Ok, well maybe it's new to consumers, but VoIP is certainly not new. - "Your phones are getting rooted across the Internet." It's pronounced "routed" not "rooted", damn it! I hate it when people pronounce it that way! - "If you ever use the Internet you can use this." Well, they are making it seem easy for consumers to switch to VoIP, so this is a good marketing message. - "It's business tools simplified to the consumer" Ahhh, ok. Sounds like marketing-speak. - this is the reinvention of the telephone I'd agree with that. Some cool features are possible with VoIP that are not possible with traditional telephones.

Ok, here's the commercials since I know you will TiVo past them during the Olypics. Oh wait, I just blogged saying Tivo'ing sports doesn't make sense (who watches recorded sports?). Well anyway..

AT&T CallVantage - Anthem - Their main 60 sec marketing pitch to "brand" CallVantage.
AT&T CallVantage - Locate Me - Talks about how their service can locate you by calling multiple phones at once to try and reach you.
AT&T CallVantage - Do Not Disturb - Talks about how their service can detect different time-zones and then play a special message such as "It's 4 frickin clock in the morning, why are you calling us now. Call back later!" Well, the commercial says it in a nicer way, but you get the point.

Comments on AT&T's gamble?



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