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AT&T Breakup Plans Likely to Doom Bundled Service
Imagine being able to deal with your long distance phone company, your cable service, your wireless provider — maybe your local phone company, too — in a single telephone call.
One-stop shopping, with a minimum of canned music.
That’s the direction AT&T had been heading over the past two years, spending $110 billion to buy cable, wireless, and local phone company access to become a multi-service provider.
“Consumers … want the convenience of one-stop shopping and integrated bundles of services tailored to their needs,” the company stated in its annual report in 1999.
But now AT&T has reversed itself, announcing plans to split itself into four companies. CWA leaders and researchers, who have documented AT&T’s troubles in a new report, say breaking up will doom bundled services, thereby hurting consumers, workers and investors.
“AT&T already lags behind its competition when it comes to bundling,” CWA President Morton Bahr said. “After the split, they’ll have no hope of catching up. We urge them to abandon their plans and focus on integrating their services.”
Ralph Maly, CWA’s new vice president for Communications and Technologies, agreed. “We don’t believe they’ve given their original plan enough time,” he said. “They are trying to pacify Wall Street and cure their ills of the big bills of buying broadband, but in doing so they’re getting rid of highly qualified workers and hurting their customers.”
CWA represents 34,000 employees at AT&T. The company has announced plans in the initial restructuring to cut about 1,000 jobs of technicians and support workers who maintain the AT&T network.
Further, the company has cut its ranks of customer service representatives for its business accounts and has scaled back efforts to gain new residential customers. Instead of relying on highly trained, skilled workers to sell services, the company is turning to low-wage telemarketing contract employees.
From a business perspective, AT&T’s bundling strategy could have been a moneymaker. A customer who spends $30 a month on AT&T long distance could wind up spending more than $200 a month for combined telephone, broadband cable, Internet access and wireless service, according to the CWA report.
Combining services can save consumers money, too — and saves the hassle of dealing with multiple companies.
Other telecom leaders, including SBC, Verizon, Sprint and Qwest, are packaging their services. According to CWA research, a home or small business customer can order local, wireless and high-speed Internet access with one phone call, and receive one bill, when dealing with Qwest. The same service through AT&T requires three calls and three bills.
In early 1999, AT&T made a big deal of its “Personal Network” plan, a flat-rate communications package for wireless, long distance, calling card and Internet access. The company called it “the ultimate bundled offer.” Customers paid a low rate for all calls with one monthly fee and a single bill.
But AT&T never took the necessary steps to integrate its long distance and wireless billing systems, CWA research shows. Service representatives have to use separate computers for the two billing systems, and customers frequently get incorrect bills. Trying to resolve the problems by telephone often takes months.
Last year, AT&T dropped wireless and Internet access from its Personal Network plan. Wireless representatives aren’t able to help customers with long distance or local phone questions, and can no longer offer an integrated bill.
Similar problems are plaguing AT&T’s fledging broadband cable service. Employees report large numbers of customer complaints about installation, service and billing problems.
“Our members take pride in their jobs, and they’re understandably upset when they can’t help a customer with a legitimate complaint,” Bahr said. “But that’s exactly what’s happening because of AT&T’s failure to properly integrate its systems and place a high priority on customer service.”
In spite of the many problems, though, he said AT&T was making progress before it announced the planned breakup.
“We urge AT&T and its shareholders to take a good look at what the company is doing and realize that it’s bad for them, it’s bad for their workers and it’s especially bad for customers,” Bahr said. “There’s still time to turn this around, but the clock is ticking.”
The CWA research report “Bungling Up on Bundling at AT&T” and more information about the company’s breakup is available at a newly launched CWA website, www.attinsider.com.
One-stop shopping, with a minimum of canned music.
That’s the direction AT&T had been heading over the past two years, spending $110 billion to buy cable, wireless, and local phone company access to become a multi-service provider.
“Consumers … want the convenience of one-stop shopping and integrated bundles of services tailored to their needs,” the company stated in its annual report in 1999.
But now AT&T has reversed itself, announcing plans to split itself into four companies. CWA leaders and researchers, who have documented AT&T’s troubles in a new report, say breaking up will doom bundled services, thereby hurting consumers, workers and investors.
“AT&T already lags behind its competition when it comes to bundling,” CWA President Morton Bahr said. “After the split, they’ll have no hope of catching up. We urge them to abandon their plans and focus on integrating their services.”
Ralph Maly, CWA’s new vice president for Communications and Technologies, agreed. “We don’t believe they’ve given their original plan enough time,” he said. “They are trying to pacify Wall Street and cure their ills of the big bills of buying broadband, but in doing so they’re getting rid of highly qualified workers and hurting their customers.”
CWA represents 34,000 employees at AT&T. The company has announced plans in the initial restructuring to cut about 1,000 jobs of technicians and support workers who maintain the AT&T network.
Further, the company has cut its ranks of customer service representatives for its business accounts and has scaled back efforts to gain new residential customers. Instead of relying on highly trained, skilled workers to sell services, the company is turning to low-wage telemarketing contract employees.
From a business perspective, AT&T’s bundling strategy could have been a moneymaker. A customer who spends $30 a month on AT&T long distance could wind up spending more than $200 a month for combined telephone, broadband cable, Internet access and wireless service, according to the CWA report.
Combining services can save consumers money, too — and saves the hassle of dealing with multiple companies.
Other telecom leaders, including SBC, Verizon, Sprint and Qwest, are packaging their services. According to CWA research, a home or small business customer can order local, wireless and high-speed Internet access with one phone call, and receive one bill, when dealing with Qwest. The same service through AT&T requires three calls and three bills.
In early 1999, AT&T made a big deal of its “Personal Network” plan, a flat-rate communications package for wireless, long distance, calling card and Internet access. The company called it “the ultimate bundled offer.” Customers paid a low rate for all calls with one monthly fee and a single bill.
But AT&T never took the necessary steps to integrate its long distance and wireless billing systems, CWA research shows. Service representatives have to use separate computers for the two billing systems, and customers frequently get incorrect bills. Trying to resolve the problems by telephone often takes months.
Last year, AT&T dropped wireless and Internet access from its Personal Network plan. Wireless representatives aren’t able to help customers with long distance or local phone questions, and can no longer offer an integrated bill.
Similar problems are plaguing AT&T’s fledging broadband cable service. Employees report large numbers of customer complaints about installation, service and billing problems.
“Our members take pride in their jobs, and they’re understandably upset when they can’t help a customer with a legitimate complaint,” Bahr said. “But that’s exactly what’s happening because of AT&T’s failure to properly integrate its systems and place a high priority on customer service.”
In spite of the many problems, though, he said AT&T was making progress before it announced the planned breakup.
“We urge AT&T and its shareholders to take a good look at what the company is doing and realize that it’s bad for them, it’s bad for their workers and it’s especially bad for customers,” Bahr said. “There’s still time to turn this around, but the clock is ticking.”
The CWA research report “Bungling Up on Bundling at AT&T” and more information about the company’s breakup is available at a newly launched CWA website, www.attinsider.com.