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Wireline: Coming Up In The World?

Posted by: Olga Kharif on January 02, 2007

Cingular Wireless, that familiar wireless brand, is about to go away. With the merger between AT&T and BellSouth approved, the combined company plans to change Cingular’s name to AT&T. Why is AT&T rebranding its wireless service to be associated with the name of a stodgy telco that’s been around for decades and is best known for its wireline service?

Because the pendilum is about to swing back. For several years now, analysts have talked about how wireless is going to kill off wireline. Well, that won’t happen, says Andrew Cole, president of consultancy CSMG. This year, 2007, will be a year of convergence between wireline and wireless communications. And as services convergence happens, wireline’s use and importance for carriers will start growing again.

AT&T is a prime example of what's to come: The company plans to offer a package of broadband and cellular service.

As these services are rolled out, I believe that wireless substitution will slow down. And we will yet think of wireline services -- rebranded and souped up -- as new and innovative.

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Reader Comments


January 3, 2007 01:12 AM

Hey, wait a second, AT&T Wireless dissolved a year ago and moved me over to Cingular with a singular lack of grace. You mean we're switching back?

Aaron Klein

January 3, 2007 01:46 PM

It would seem that way, but in reality, this should be much smoother (I hope so, as a customer).

The old AT&T Wireless Services (ATTWS) to Cingular switch was a merger, where they had to move customers from the ATTWS platform and billing system to the Cingular platform and billing system. And yes, it was a nightmare.

I literally had salespeople come in post-merger and try to sell us on switching from Cingular to...Cingular. When I explained that we already had Cingular, they said they had fantastic deals if I would just sign up with Cingular through them...and I finally got out of them that they were ATTWS reps and the internal systems were still separate.

My understanding is that this change is just a rebranding. AT&T isn't going to try and integrate the operations and sales force of Cingular into its wireline and data businesses. It will simply change the branding so that everything will be AT&T. You'll have an AT&T cell phone, an AT&T land line and AT&T Yahoo DSL.

It's usually simpler to change a logo than merge two businesses together. Let's hope so.

Sean Hackbarth

January 3, 2007 10:45 PM

Convergence better be more than just putting wireless and broadband on the same bill. I imagine a network that lets the user use one handset and one phone number no matter if they're at home or out-and-about. That would be innovative.


January 4, 2007 11:13 AM

A single phone number might be best for a lot of folks. I want and use a second (unlisted) number on my cell phone to keep incoming calls to just a few sources for critical communications.

Senaka Balasuriya

January 5, 2007 01:21 PM

The pendulum is definitely not about to swing back. The analysts are right – wireless is slowly killing wireline. That is, traditional circuit switched telephony is getting killed. “Killing” in the sense that computers killed typewriters - computers didn’t completely kill typewriters 100%, but pretty much made typewriters obsolete.

Telephone providers such as Verizon are losing circuit switched customers at an astonishing rate. Where are these customers going? Mostly to cellular (AT&T itself has mentioned that Cingular is the top asset of BellSouth). There’s also a secondary move to VoIP based services.

Of course, broadband adoption will increase even further, and this is where wireline players such as AT&T will make a play…but the game is on for them…from the likes of Vonage, Skype, etc.

Sean Hackbarth

January 5, 2007 11:51 PM

VOIP doesn't feel like real innovation to me. Vonage is just like old-school phone service in that you plug your phone into a network, and it works. Only instead of the circuit switched system it's plugged into a net connection. That's a commodity business where companies will fight based on price. That will mean it will dive towards free with Skype being a big winner.

AT&T or any other baby bell (my how they've all grown up) need something new. ITV might be that new tech with zip, but I think something like really converging wireless with wired phones is the way to go.

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BusinessWeek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, Douglas MacMillan, and Spencer Ante dig behind the headlines to analyze what’s really happening throughout the world of technology. One of the first mainstream media tech blogs, Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.



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