Why SBC Really Bought AT&T

Ed Whitacre Jr., the chief executive of SBC told the Senate Judiciary Committee why his company, which has been losing about 60,000 access lines each week really decided to buy AT&T. First for the AT&T network, and then for the business services. But another reason he gave was AT&T’s VoIP expertise.

the “next big thing” in communications technology is voice over Internet Protocol…or VoIP. It has already opened the door to a host of new competitors. Dozens upon dozens of cable companies and others are using VoIP to provide telephone service, and they are winning customers. SBC does not have a consumer VoIP service but AT&T does. The combined company will have the resources and incentives to compete with VoIP in our region, outside our region and for business customers around the world.

I guess that was before AT&T filed a document with SEC saying that it had garnered a mere 53,000 customers with its VoIP effort, CallVantage. Still, David Dorman’s passionate defense of the merger was impressive.

Most of you, and your parents and grandparents, have always known AT&T primarily as your phone company, a residential consumer-oriented company. That is not the AT&T of today. The AT&T of today is a global IP networking provider with a software infrastructure.

I think despite a lot of obsession over consumers and what not, that expertise is going to be increasingly important in the future. Funny, SBC head honcho did not list that as the first and foremost reason why his company is buying Ma Bell.