AT&T's Jules: Cybersecurity is a $40B opportunity

AT&T (NYSE: T) on Wednesday said the best opportunity for growth for its enterprise services unit will be in the cybersecurity segment.

Speaking at the Morgan Stanley TMT Conference, Frank Jules, President of AT&T's global enterprise division, said that businesses are going to double or triple cybersecurity spending to thwart harder to detect cyber attacks.

"We see them on a daily basis and they are now getting smaller instead of coming in huge waves, which were easier for us to detect," he said. "Every chief information officer at major corporations that I meet wants to talk about security. I think this will be a $40 billion market one day."

Tracking these threats, however, becomes even more complex as multinational corporations (MNCs) continue to expand into more countries outside of the United States.

To assist MNCs with their international expansion efforts, Jules said the service provider will accompany connectivity services such as Ethernet with a suite of security services. Despite the economic issues in Europe, service providers that have made investments in Latin America, southern Asia and the Middle East are seeing the fruits of their labor in these regions.

This new focus on cybersecurity comes on the heels of its $22 billion VIP program to upgrade both its wireless and wireline networks.

While the wireline upgrades, including an ambitious move to expand fiber into additional 1 million business customer locations, are focused on its domestic markets, AT&T continues to be a sizeable player in the global telecom market, particularly with Ethernet services.

Business services in general, despite the revenue drag from declining legacy services like Frame Relay, continue to perform well. The telco's Q3 2012 strategic business services revenues, including Ethernet, VPN and security, grew 11.4 percent over Q3 2011.

Ethernet and VPN are important elements to AT&T's cybersecurity ambitions.

According to Vertical Systems Group, AT&T achieved a fifth place position on the Mid-2012 Global Provider Ethernet Leaderboard, trailing Verizon, COLT and BT. However, in the U.S. market AT&T continues to remain the number one retail Ethernet player.

AT&T could use its embedded domestic Ethernet customer base, in addition to its global network and carrier partnerships, as a higher speed foundation to deliver more managed security services to existing and new customers that are considering expanding into international markets.

For more:
- Reuters has this article

Related articles:
AT&T Q3: Consumer, business IP drive up wireline revenues 2%
AT&T to inject $9.5B into its pension plan
AT&T could bring U-verse to another 3M users, says analyst
AT&T leverages Fiserv for its walk-in wireline bill payment system