Duo dissolves disappointing $10 billion global telecom venture
AT&T and British Telecommunications plc last week dissolved Concert, their 3-year-old, $10 billion global telecommunications venture. Concert was supposed to ease frustrations that multinational companies experience when buying global communications services. But it never achieved the goals AT&T set for it, which included helping create a global AT&T IP network and generating increased overseas revenue. Some customers say it didn't live up to their expectations, either.
Rockford Corp., an audio system manufacturer in Tempe, Ariz., links its locations in Germany and Singapore to the United States through frame relay circuits and a virtual private network. Data services have always been more difficult to buy and coordinate overseas than domestically, and using Concert didn't help much, despite the promise of better cooperation between AT&T and BT, says Chris Duffy, a communications engineer at Rockford. "You would have thought that it would have made it better, but for us it didn't work out," he says. The company will now be served solely by AT&T.
Concert never won as many customers as it could have because potential buyers didn't fully understand the complex relationship between AT&T and BT and couldn't sort out which carrier was providing what services, says Sandra Palumbo, an analyst with the Yankee Group. Both AT&T and BT have been hit with losses resulting from their participation in Concert.
AT&T and BT will complete the breakup of Concert by the middle of next year. Each will reclaim the network assets and customer contracts it had contributed to the venture and will honor the terms of contracts between customers and Concert. The carriers have reached three-year commercial-service contracts with each other to continue serving those users.
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