AT&T – Great Idea – Fiscal Smartness – Operational Efficiency

Implications: I congratulate Ralph de la Vega.  It is not exactly what I had suggested in my article; “AT&T Spending Money On Wireless – I Have Another Suggestion”, but its close enough.

Analysis: Back in May 2008, I had supported the idea of cross using network assets to increase optimization and decrease costs.  I had said, “Watch out for where AT&T is spending money as both a wireless carrier and wireline carrier.  If the company behaves the way it should it will be cross using its assets to support both its wireless and wireline companies.”

What AT&T is doing goes even further.  AT&T is reorganizing its management team to enable Ralp de la Vega to lord over all landline and wireless services.  Why is this better?  It is better because the landline and wireless divisions would have the same single boss.  Hard to tell the boss the other division is not being cooperative therefore the project failed.  If someone was dumb enough to tell de la Vega something like that they would probably be “FIRED”.

This goes beyond cross using assets.  With a single management head, both the landline and wireless divisions will have to cooperate.

According to news reports, Mr. de la Vega would retain his role as chief executive of the company's wireless unit, but that wireless unit would be folded into a broader consumer markets division with responsibility over landline phone, Internet and TV service.

Smart move.

By the way a reorganization of this magnitude will lead to further changes.