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Bob Wallace, Executive Editor, xchange RSS
bwallace@vpico.com

08/18/2008

AT&T’s VoIP Plan: Goodbye CallVantage, Hello U-verse Voice?

Why would anyone leave a time-tested, reliable VoIP service for one that’s newer, costs more and requests change? Answer: If AT&T Inc. (T) stopped offering it. That could be the case with CallVantage.

AT&T says it’s no longer taking new orders (residential or business) for CallVantage; which was launched four years ago, created a loyal following and filled in a glaring void at the time in the telco’s voice service plan.

The service offers unlimited local and long distance calling, attractive rates and numerous features.

There’s a strong chance that CallVantage became too attractive and well received. Why else would AT&T wait almost two years to make its U-verse bundle a true triple play and roll out U-verse voice earlier this year as the third leg of its TV and Internet package?

AT&T didn’t even begin to offer U-verse voice until this past January, and still has yet to get it to all the markets where U-verse TV & Internet is available.

Ummm. So, I’m afraid to ask, what happens next? AT&T would be crazy to shut down CallVantage until customers could be moved/lured/dragged to U-verse voice or something else.

They’d be crazier to make any “transition” difficult, challenging or downright painful. Disruption could have a negative effect beyond VoIP, especially with cablecos selling the living heck out of digital voice services.

The real problem is that nobody likes to leave something they have no issues with for something new. Moving to U-verse voice doesn’t seem to offer any big price lures, though linking it to wireless service may be attractive.

In a world where technology changes most everything faster than we can keep up with, the only two sayings that come to mind in this situation are 1) People fear change. 2) If it ain’t broke, don’t fix it.

In the meantime, let’s hope AT&T comes out in the open with a calling plan that CallVantage customers and others can live with, instead of without.

Related Articles

Show (VON) Fall 2006: AT&T Adds Softphone, Videconferencing to CallVantage

AT&T Posts Biggest-Ever U-verse Growth


08/11/2008

Is There Life Without Telco TV?: The Windstream Story

News of dropping profits for TV-less WindStream Corp. (WIN) and interest in mergers amid video-driven gains for numerous other service providers raises the question for midsize telcos: Is there really life for carriers without their own TV offering? Looks like the answer is no.

Windstream resells satellite TV and has a deal in place to resell TiVo Inc. (TIVO) The company also has high-speed Internet from which the TiVo programming is delivered. But it doesn’t have telco TV.

The list of operators reporting video-driven gains for the second quarter includes AT&T Inc. (T), Verizon Communications Inc. (VZ) and more. They’re either very large or relatively small operators.

WindStream is neither very large nor very small. Nor, sadly, is it on that list. It’s too “large” to qualify for government funds under the USDA’s RUS program. It’s too small to do its own.

Triple play providers report TV helps sell broadband. AT&T claims that 85% of U-verse TV customers take U-verse Internet too. WindStream has the Internet, but not its own wireline telco TV. And it recently sold its wireless assets to AT&T.

So, with profits down millions and the company looking at mergers, what’s a tweener, telco TV-less operator to do?

I wish I had some easier answers, but the only thing that comes to mind is signing up for managed and/or turnkey IPTV services from the likes of SES-Americom Inc. and others who have targeted the rural telco and ILEC markets.

Wasn’t that the grand plan of such package providers who started talking about their innovative, avoid-time and capex plans more than four years ago? While many less than large telcos already offer a landline TV service, many more, such as Windstream, seem to need one.

It may be too late for WindStream. But if the telco merges with another, I’ll bet it has its own TV service.

Stay tuned.

Related Articles

WindStream, Comcast Double Internet Speeds

Windstream Offers 2Wire Wireless Home Gateways

Windstream to Pay $585 Million for CT Communications


08/04/2008

Why AT&T Needs to Buy a Satellite Operator

By year-end, but possibly early next year, AT&T Inc. (T) will buy a satellite operator to provide TV service to the half of the folks in its territory that won’t have access to its IP-based U-verse. My bet is DISH Network Corp. (DISH).

Why buy? Because AT&T is fast approaching the end of a multi-year resale-type deal with DISH, whereby it provides the Telco’s current Homezone video and Internet package. AT&T has already told DISH the deal is up at year-end, which was part of the original agreement.

AT&T wants what DISH does officially under the AT&T umbrella. Why? Because right now, AT&T gives the separate company capital that it would prefer to keep for itself in this worsening economy that’s seeing the Telco cut capex for this year... and likely beyond.

AT&T also needs to control the video services it provides, whether from the ground or from the skies. Providing separate services from different companies has already created a muddied marketing message, industry experts concur.

Is there a chance AT&T wouldn’t grab DISH? Sure. Stranger things have certainly happened with AT&T. But, I wouldn’t bet on it. It seems like there’s an anti-resale sentiment at high levels in AT&T. And with the DISH deal ending at year-end, it would seem AT&T would want to avoid service disruption to Homezone users.

Is there a chance AT&T wants to first see a bidding war between DISH Networks and The DIRECTV Group (DTV) to be the Telco’s entity? Definitely, as it would serve to make an acquisition less expensive. And AT&T has worked with DIRECTV too, as has Verizon Communications Inc. (VZ).

Would Verizon let AT&T walk away with its satellite TV resale partner? Does AT&T even need to go there?

Are there other options? Yes, SES-Americom Inc. already wholesales a managed, turnkey IPTV package to service providers looking to avoid the capex associated with buy headends and other price equipment. Hmmmm.

Programming-wise, DIRECTV could be more alluring as it has the coveted NFL Sunday Ticket package. I can’t remember who has the most HD channels, but that could be an important factor.

What could/would DISH cost? I’m not a numbers guy, so I can’t help you there. Same for DIRECTV.

Can AT&T afford to buy a satellite operator in a plunging economy and in an environment where cost avoidance is becoming the phrase of the day? Those two reasons could also be the ones to fuel an acquisition.

So the real question becomes, can AT&T afford NOT to buy a satellite operator, roughly two years after it’s commercial launch of U-verse? And with video its core wire line focus? I say no.

What do you say?


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