AT&T to invest $750M in global network

AT&T this year will introduce new features to its VPN service and expand high-speed connections to additional countries as part of more than $750 million of investments in its global business network.

The expansion comes as network demand grows worldwide, partly as a result of increasing video traffic, and as rival Verizon Communications rolls out new offerings through its Verizon Business unit.

AT&T this year will let enterprises set up special VPN routing groups to help them establish extranets with partners and customers, said Bill Archer, senior vice president of product management. It will also introduce new class-of-service capabilities, which are used to distinguish different types of traffic.

AT&T will also provide a more efficient access method for its MPLS (Multiprotocol Label Switching) VPN outside the United States in the next few months. Until now, unless an overseas customer had a fat pipe of 155Mbps or more to AT&T, they had to use Frame Relay or ATM to get to the VPN. Now they can use PPP, a more efficient protocol, at any speed. Because it has less overhead, PPP means better use of available bandwidth, according to AT&T.

Meanwhile, AT&T will introduce billing plans that in part are based on usage rather than a flat monthly rate for a certain level of bandwidth, Archer said.

Following its acquisition of BellSouth, AT&T now fully owns Cingular, the largest U.S. mobile operator by subscribers. This year it will start down a long path toward converged wired and wireless services, introducing collaborative support between the two units. If a customer reports a wireless problem to the support center for AT&T’s wire-line business network, that support center will log the problem and forward the call to the wireless support group, Archer said. Evenutally, there will be one support center for both types of services. A single contract and bill for wired and wireless also will come over time, he said.

The carrier will expand the reach of its high-speed networks significantly in 2007. By the end of the year, businesses will be able to reach the MPLS VPN via Ethernet in 31 countries, up from 8 at the end of 2006. DSL access will be available in 34 countries, up from 19. Satellite or private-line access, needed in more remote locations, will be available in 51 countries, up from 19.

The fast-growing markets of Asia-Pacific, the Middle East, and Latin America will be a focus for investment this year, as well as France, Germany, the United Kingdom, and Canada, AT&T said. The carrier plans MPLS network nodes in Malaysia, Morocco, Pakistan, Saudi Arabia, and Vietnam, as well as three more in India. Having a node in the country lowers customers’ costs, Archer said.

Multinational enterprises want to be able to connect to a service provider’s network the same way everywhere they do business, said Frank Dzubeck, president of the consultancy Telecommunications Network Architects in Washington, D.C. Carriers are expanding their networks to meet that need, but they are less motivated to combine wired and wireless services under one plan because they don’t see a financial advantage to that, Dzubeck said.