AT&T Without a Division for Enterprise Mobility

Implications: The AT&T reorganization into four units lacks a separate division for Enterprise Mobile Solutions to promote field communications, realtime applications, and workforce productivity.

Analysis:

AT&T’s reorganization into four units strategically places wireless in the consumer division to improve marketing triple and quadruple packages against cable providers.  But a key issue is how AT&T will sell enterprise mobile solutions by placing the wireless unit into the consumer program.  The need could be a separate division for Enterprise Mobility.  Enterprise solutions generally require partnering to integrate connectivity, servers, and e-mail.  Nokia recently announced ending its Intellisync corporate e-mail and selling the security appliance business.  Nokia commented about putting aside its offerings to better integrate with Cisco, IBM and Microsoft.  Can AT&T’s enterprise managers develop vendor alliances while reporting to the merged unit of AT&T Mobility and Consumer Markets?  AT&T management is stressing how the restructuring will “further align our employee teams” and providing the “one AT&T” experience.  At the same time, will AT&T be committed to forming alliances as Google rolls out Android, Cisco enhances its collaboration tools, and Microsoft provides open APIs?

In acquiring the Bell telcos, the former SBC did similar realignments and placed the SMB sector in the consumer division to obtain savings in the call centers.  For this reorganization, AT&T has recognized the SMB importance by including it in the Business Division of domestic enterprise and global business services.  For the second quarter of 2008.  AT&T reported that enterprise revenue declined 1.4% whereas the SMB sector was up 1.6%.  Verizon also struggled with only a 1% increase in business revenue.  Verizon’s advantage was that managed services increased 18% to offset the slowdown in network sales.  AT&T might also find that managed services like Mobile Device Management (MDM) eanble enterprise mobility to be a profit center distinct from bundling for the consumer segment.  Because enterprise mobility improves productivity, it can be the driver for building next-generation mobile networks.