AT&T; Aims to Simplify Global Phone Service : Telecommunications: With partners from several nations, a new venture will battle British Telecom for market share.
American Telephone & Telegraph Co. on Tuesday announced an agreement with several international telecommunications carriers to build a global network to streamline telephone service for multinational corporations.
The alliance between AT&T;, Singapore Telecom and Japan’s Kokusai Denshin Denwa Co. will spend more than $100 million over several years to set up a global network to manage voice and data traffic for business customers in the United States and the Pacific Rim.
“This is part of a worldwide restructuring of the telecommunications industry,” said Alvin Mirman, a telecommunications analyst at Gruntal & Co. “The whole world is becoming global and (telecommunications companies) have to provide better global services.”
Under the agreement, AT&T; will have a 50% stake in the venture, to be called WorldPartners and based in New York. KDD will hold 30%, and Singapore Telecom will hold 20%, AT&T; said.
The agreement will allow customers to use phone networks of any of the member companies, AT&T; said, while billing services will be consolidated in a customer’s choice of country, language and currency.
The network will begin operating in North America, Asia and the Pacific Rim later this year and will later expand to Europe and Latin America. The services offered by WorldPartners will be known as WorldSource services.
“The customers for these services have operations around the world,” said Randall Tobias, vice chairman of AT&T.; “They want communications services that give them global capabilities. And they want them now. WorldSource services offer a new level of global service and global reach to these global customers.”
The alliance pits AT&T; against British Telecom in a battle for a market worth an estimated $10 billion now and $25 billion by the end of the century, according to AT&T.;
AT&T; is the No. 1 provider of long-distance telecommunications service in the United States, while KDD is the Japan’s largest international telephone service provider. AT&T; has about 11 million business customers in the U.S.
AT&T; said the alliance will eliminate the problems that multinational companies face when they make many international calls using several carriers. Such problems include having to call different phone carriers to get maintenance on a private line and receiving billings in different currencies and from different carriers, the company said.
The initial $100-million investment by the carriers will include funds to develop proprietary software for members of WorldPartners, AT&T; said. AT&T;, Singapore Telecom and KDD have agreed to create an operating organization to provide a range of support services, AT&T; said, including work for billing, ordering, maintenance and customer support.
Other international long distance carriers will join WorldPartners, including Korea Telecom, Unitel Communications in Canada and Telstra in Australia, AT&T; said.
WorldPartners is open to new members from around the world and will provide services in more countries as new members are added, AT&T; said.
AT&T; shares rose $1.50 to $62 a share in NYSE trading.
