Bell Atlantic Abandons AT&T as Prime Contractor for Broadband Network

Strategic Insights -

Bell Atlantic has terminated its partnership with AT&T Network Systems for the management of engineering and systems integration for its full-service, fiber-based broadband network. The regional holding company will now directly manage most of the engineering and systems integration work, citing a need to maintain core competencies in this area.

Key Takeaways:

  • Bell Atlantic will manage most of the engineering and systems integration for its full-service, fiber-based broadband network, abandoning its previous partnership with AT&T Network Systems.
  • The company will continue to purchase equipment for the initial deployment of the network from AT&T, General Instrument, BroadBand Technologies, and other suppliers.
  • The move will not delay Bell Atlantic's full-service network deployment, according to Vice Chairman Lawrence Babbio.
  • The dollar amount of systems integration work AT&T may have won for this business would have been less than 10% of Bell Atlantic's $5 billion capital spending on access networks during the next five years.
  • Eric Rabe, Bell Atlantic executive director of corporate relations, stated that Bell Atlantic realized its needs for a systems integrator are a core competency that should remain internal.
  • AT&T Network Systems respects Bell Atlantic's decision and believes there are still ways the two companies can work together.
  • The partnership was terminated due to Bell Atlantic's decision to maintain its core competencies, not due to price or performance issues.

Statistics:

  • 10%: The amount of systems integration work AT&T may have won for this business as a percentage of Bell Atlantic's $5 billion capital spending on access networks.
  • $5 billion: The amount Bell Atlantic plans to spend on its access networks over the next five years.
  • 5 years: The time period during which Bell Atlantic plans to spend $5 billion on its access networks.

Sources:

  • Eric Rabe, Bell Atlantic executive director of corporate relations phone number: 703/974-3036.