Reintroducing AT&T--or SBC?

Posted by: Peter Burrows on December 30

This morning, I read that AT&T would launch the biggest ad campaign in the 120-year history of the company, starting with a major presence in Times Square on New Year’s Eve. Then, a few minutes later, I got an e-mail from former AT&T chief technology officer Hossein Eslambolchi, advising myself and others of his new contact info as of 2006—when he will no longer be working for SBC.

That’s got me thinking: what company, exactly, is being reintroduced here? No doubt, the marketing pitch will focus heavily on how SBC will be leveraging AT&T’s world-famous technologies to bring good things to life. Oops, wrong tag-line. Make that, “Your World. Delivered.” (Not sure what I think of that, but Rich Smith at Motley Fool certainly does).

Trouble is, anyone close to AT&T knows that Eslambolchi was a critical player in maintaining AT&T's status as a technology leader. That includes Om Malik, for one. In recent years, Eslambolchi oversaw a remarkable makeover of Ma Bell's networks--one that gave it possibly the most advanced IP-based backbone in the world for safely delivering anything from a simple phone call to running a sophisticated corporate disaster recovery system. As of a year ago, AT&T's IP network was as reliable as its older phone and data networks--a remarkable achievement given the best-effort underpinnings of IP.

Also, Eslambolchi consolidated hundreds of AT&T data centers into just a few. That created the opportunity for AT&T to lay-off thousands of tech workers--a miserable task, but one that was hugely important in enabling the company to struggle onward. Indeed, some analysts think the company would never have remained healthy enough to be attractive to SBC, if not for Eslambolchi's efforts, which enabled the company to remain strong in lucrative enterprise services even as the consumer long distance biz was vaporizing.

I don't know all the internal politics, although I'm told by people who know Eslambolchi that he was offered a job--but not one sufficiently big enough to make it worth his while, given the mega exit-package that he will get. But it's worrisome to me that Ed Whitacre didn't do whatever was necessary to keep Eslambolchi on board. After all, SBC has big plans to deliver IP-TV and other Net-related services, and CFO Richard Lindner recently told me that enterprise services, where AT&T was relatively strong, was one of the biggest growth opportunities for the company in the years ahead. Eslambolchi would have been the perfect person to help on both of those fronts, given his talents as an operations executive, an innovator with more than 100 patents to his name, and as a bold, but pragmatic, visionary.

As such, I'll make sure to have more than a few grains of salt on hand as I watch those new AT&T ads.