AOL, AT&T To Deliver Mobile Data Services

AT&T Wireless and American Online are working on a new mobile service to run on a next-generation wireless network that AT&T expects to deploy. The service will essentially be a customized version of AOL. AT&T customers who buy a co-branded, customized phone due next year will, upon turning on their handsets, have access to E-mail, instant messaging, and various types of content. The companies also are upgrading the AOL service currently offered to users of AT&T's PocketNet phone, adding instant messaging and making it simpler to navigate to the AOL mobile portal.

It's all part of an alliance AT&T Wireless and AOL revealed Wednesday that also calls for AOL Time Warner to promote AT&T products and services. An AOL spokesman says the agreement is an important step toward offering mobile data services to AOL subscribers. AOL, says the spokesman, is working to deliver a growing number of services to devices beyond the PC.

Wireless service providers, under increasing pressure to find new revenue, are eager to line up services that make maximum use of next-generation networks. An AT&T Wireless spokeswoman says the alliance with AOL not only yields that type of service, but it also serves as a strong endorsement of the carrier's next-generation technology. AT&T Wireless is planning to launch its so-called 2.5G network next year, with the intent of delivering the kinds of streaming services and rich-media content that's been difficult to deliver on existing wireless networks.

Forrester Research analyst David Cooperstein says the arrangement could pay big dividends for both companies. Ultimately, Cooperstein says, the success of the service hinges on AT&T's 2.5G network offering the kind of reach AOL requires. But Donald Longueuil, an analyst with Cahner's In-Stat Group, thinks the alliance favors AT&T Wireless. Longueuil says wireless carriers have done a poor job of delivering data, and he expects AT&T Wireless to benefit from AOL's expertise in that area. Says Longueuil, "AOL will show AT&T how to create a profitable wireless data service." He says it also doesn't hurt that AT&T gets an inroad into delivering such services to AOL's base of 30 million subscribers.