AT&T to acquire BellSouth, execs discuss IPTV

Soon after closing the SBC-AT&T merger, AT&T is now acquiring BellSouth for $67 billion. Their joint ownership of Cingular (60 percent AT&T, 40 percent BellSouth) has been cited as an enabler for a long time now. However, in the face of the increasing threat posed by cablecos and Internet companies, the trio concluded that by converging on a single IP platform (IMS) and providing IPTV services, they could experience some savings. AT&T and BellSouth executives gave some insight on how BellSouth's IPTV plans would be integrated in Project LightSpeed in response to analyst questions.

  • AT&T COO Randall Stephenson: "What BellSouth is doing today is very complementary to what we're trying to accomplish with our LightSpeed initiative... They are on a path within the next couple of years to have 12 to 24 megabits through a substantial portion of their footprint [giving AT&T flexibility] as we ramp LightSpeed... we just continue with the BellSouth initiatives to get the bandwidth pushed down into the customer base and keep going on our territory with the LightSpeed... BellSouth has a relationship with DIRECTV [and AT&T has one with EchoStar]... Once we close the transaction we will have to evaluate how we synchronize those."
  • AT&T CFO and SVP Rick Lindner: "In terms of LightSpeed we don't have any incremental CapEx built into the merger plans right now... The plan that BellSouth is on to get the bandwidth into their network represents 90 percent of what it takes to get project LightSpeed type infrastructure deployed."
  • BellSouth Chairman and CEO Duane Ackerman: "...BellSouth is doing some trials in the IPTV area, and the more experience we have the more learnings we have in bringing it to market, the more effective and successful we will be with our video offering. So it is just a positive what they are doing."

Though BellSouth's 12 Mbps to 14 Mbps is not enough to support the IPTV requirements of 20 Mbps to 25 Mbps, it should help AT&T kickstart the service before they start delivering bandwidth intensive applications.

For more on this:
- read AT&T's press release
- check out AT&T's conference call transcript (pdf, Wall Street Journal sub. req.)

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