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AT&T Unity: A First Step in Converged Wireline-Wireless Services| January 22, 2007 | Wireless Services - U.S. | Competitive Intelligence Report Analyst: Bill Ho
On January 19th AT&T announced the creation of a new calling plan that provides unlimited calling with all AT&T wireline and wireless customers. The new AT&T Unity Plan includes phone numbers of former BellSouth and Cingular Wireless subscribers. To qualify for the AT&T Unity Plan customers need to be or sign up for both an AT&T wireless service and an unlimited AT&T local and long distance wireline service. Analytical Summary • Current Perspective: Slightly positive on AT&T’s first step towards having a converged product offering of wireline and former Cingular Wireless services, because the new AT&T Unity plans are at the core an initiative to retain wireline customers with unlimited calling to over 100 million AT&T wireless and wireline phone numbers in a 22-state service area. At the end of December 2006, AT&T completed the acquisition of BellSouth and took full ownership of Cingular Wireless with a commitment to expand its incumbent local carrier coverage of voice, DSL, and wireless services and provide added benefits to the consumer. Still, Unity is far from national and serves to benefit the wireline side more to stem its access line losses. • Vendor Importance: High to AT&T, because with the Unity plan, the carrier has quickly delivered on its promise to regulators and the public to bring converged services to the newly consolidated 22-state footprint. The challenge will be to explain to customers the benefits of this new feature and what it takes to qualify since the cost of the existing plans will not change and there is no initial bundling cost incentive. • Market Impact: High on the wireless services segment, because AT&T now has a near national wireless-wireline converged offering, whereas other competitors are just getting off the ground. Though T-Mobile has a market trial of Hotspot @Home, it has yet to roll it out nationally. Sprint has just begun to launch converged market trials with its joint venture partners, and Verizon Wireless has yet to hint at a wireline-wireless convergence effort. As an aside, Cingular has an answer to Alltel (My Circle) and T-Mobile’s (myFaves) unlimited wireless calling plans though limited in footprint availability. Recommended Competitor Actions • Alltel and T-Mobile should promote the flexibility and ease for customers to change their calling circle. While the calling area is potentially 100 million phones, realistically prolonged calling is to a select group of people. All other calls can be handled with anytime minutes. • Sprint and its joint venture cable partners need to rapidly get beyond wireless trials in a few select markets and offer an alternative and ratchet up features (voice or data) to the AT&T Unity Plan. Cable providers can exploit the high cost of AT&T’s new calling plan which requires qualifying customers to spend at least a $110 a month to receive the perk of unlimited calling between AT&T wireless and wireline numbers. Additionally, Sprint should explore the ability for customers to have unlimited calling to all its joint venture partners’ voice lines. • Sprint joint venture cable partners, which are AT&T’s main residential service competitors, need to keep hammering away at winning long-term AT&T consumers with their own service bundles, particularly by adding voice and wireless services to their high-speed Internet and video line-up. Unlike AT&T Homezone, cable services provide voice, video and broadband through a single pipe. • Verizon Wireless needs to work with its wireline parent to offer a similar benefit if not mirror most if not all elements of the Unity plans. Ideally, it should bring in additional features beyond unlimited calling within the wireline footprint. Some features include a unified messaging component or a data bundle that bridges wireline and wireless that may include its newly announced MediaFLO-based V CAST Mobile TV and FiOS. Recommended End User / Customer Actions • Customers (consumers and small business) who are served with AT&T wireline services and are Cingular users should look into Unity plans as all calls to AT&T landlines are unlimited. However, if consumers will need to upgrade their wireless plans to $60 (individual) and $70 (family) and have an unlimited wireline calling package as a plan condition. Moreover, customers will be asked to consolidate to one bill as well and have to give up the Rollover feature. • Customers will need to understand that, if there is a termination of the wireline portion, they will no longer have the benefit of mobile-to-wireline calling, as this is automatically removed. Cingular calls will be billed at normal airtime rates.
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