AT&T: Legacy business service customers are still strategic

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Image: AT&T

As AT&T converts more of its large and smaller business customers to next-gen IP Ethernet and cloud services, the telco said that it’s still important to nurture its legacy TDM customers.

Steven Hodges, SVP of business customer experience at AT&T, told investors during the Drexel Hamilton Telecom, Media & Technology Conference that he has to think about how every service works for each customer it serves.

“When I look at it, I try not to get tied up in strategic versus legacy because I have to run across everything from an end-to-end perspective,” Hodges said. “Whether that same customer buys all the services from us today, I have to worry about how they all fit together.”

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Evidence of strategic services growth was evident in the AT&T’s second quarter results as Ethernet and wireless revenues rose $200 million, or 8 percent, year over year to $2.8 billion. These services now make up 36 percent of business wireline revenues.

However, overall business revenues declined slightly to $17.6 million, down from $17.7 billion in the same period a year ago. AT&T attributed the decline to the sale of some of its hosting assets and foreign exchange.

Hodges said that while AT&T is seeing more of its customers migrate to IP-based services, the telco has to nurture those customers that are on legacy platforms.

“Customers that are demanding more bandwidth are certainly jumping naturally across our legacy services to IP, but we’re wrapping our customer experience around the whole thing,” Hodges said. “A legacy today, even if that’s all they have, is still a strategic customer.”

Regardless of its next-gen or legacy services, Hodges said that business customers want AT&T to help them tie together their offerings into a common solution that includes a mix of wireline and wireless services.

“What we’re learning, and this feeds back into the customer experience, is that customers don’t always want to be integrators on their own,” Hodges said. “They have their core business to work on so they like an integrated approach where AT&T will sell them wireline and wireless anywhere globally just about anywhere in the world.”

Hodges added that business customers also want the telco to “wrap security around all of its services.”

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Special report: The top 12 wireline providers in Q2 2016: AT&T, CenturyLink, Verizon’s results marred by broadband losses

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