Why it's so cutting-edge: Being an incumbent telco with a rich brand legacy makes you tough to beat, but not necessarily cutting edge, so let's put those factors aside. With mergers done and closed (though with more integration to be accomplished) AT&T can now focus on exploiting that breadth and reach. It's already doing so by aggressively pushing its U-verse IPTV service into new markets. As of late June, it already had a base of 40,000 or so TV customers to build on, which may pale in comparison to some other telcos in the TV market, but new CEO Randall Stephenson has said the company plans to add 10,000 new video customers per week by the end of this year.
The second area of innovation giving AT&T cutting-edge status is its goal, as stated by Stephenson at this summer's NXTcomm trade show, to fully integrate wireless into all of its communications services. With Cingular Wireless in house and some strides toward converged services and IP Multimedia Subsystem deployment (and having dibs on the iPhone doesn't hurt), AT&T has the potential to shake a stodgy telco rep and redefine itself.
But can it keep that edge? Video isn't easy for any telco, and AT&T reportedly experienced delays related to problems with its middleware. In a competitive market where cable TV companies are becoming ever more confident and energetic selling voice services, AT&T has more to lose than anyone if it can't make video stick. Also, making converged services work means wireline and wireless groups need to be on the same page strategically, and it's no secret that inside any telco that remains a difficult challenge.