AT&T's Stephenson: IP transition will start showing cost savings in 3 years
AT&T (NYSE: T) may have set 2020 as the year when it will transition its TDM network to all IP, but Randall Stephenson, CEO and chairman, says that the provider will start seeing cost savings by 2016.
"You'll see some of it start to materialize in the next three years," said Stephenson during the UBS Global Media and Communications Conference. "We have a number of initiatives, including Project Agile, which is about streamlining our operations around an IP product set."
Stephenson added many of the real savings won't come until they can actually shut down a TDM-based switch that has been primarily used to deliver traditional telephone service and special access services such as DS-1s.
"The really big numbers come when you get really close to turning off the switch on the old legacy TDM infrastructure," he said. "There are significant network and IT costs involved in sustaining those products and you don't turn the lion's share of those off till you take that last product out of service."
A key element in moving ahead with the IP transition is the FCC.
Although AT&T has been one of the leading advocates of the TDM-to-IP transition, the telco has expressed frustration over the FCC's slow pace in giving it guidance on the next steps to conduct TDM-to-IP trials in two of its 4,500 wire centers.
It appears that AT&T is now getting the clarity it needs.
Tom Wheeler, the FCC's new chairman, has made the IP transition a key priority. He proposed in November that the regulator make an order on the matter at its upcoming meeting in January.
Stephenson applauded Wheeler's swift action on the trials.
"I take a lot of comfort in the chairman coming in and very quickly addressing the trials," Stephenson said. "It's two trials out of 4,500 wire centers and it doesn't seem to be that complicated to get out there and do a couple of trials to see what this looks like over the next couple of years."
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Updated article on Dec. 10 to mention Project Agile.