The History of ATampTs Long Evolution Into a Technology Powerhouse
As I was growing up, ATT was known as "Ma Bell." For over half of my life, ATT had pretty much a lock on the telecommunications market. Many had a love-hate relationship with the firm, due to everything from service and billing issues to quality of service problems. In fact, detractors often called ATT's logo the "Death Star," a reference to Star Wars' planet-killing space station. Yet it was the basically the only game in town when it came to phone services. But in 1982, the U.S. government pushed to break up ATT, forcing it to split into what were called "Baby Bells." These Baby Bells became regional telecommunications companies, eventually leading to the birth of companies like MCI, Sprint, and, more recently, leading to the rise of firms like Verizon and T-Mobile. By the end of the 1980s, deregulation was in full swing, creating a competitive environment that has been extremely beneficial for modern communication. I was on an ATT mobile advisory board in the mid-90s. I remember telling ATT's team that VoIP, meaning voice calls placed over the Internet, would be highly disruptive to their business. But at the time, landline phones were ATT's major cash cow, and it just couldn't see how VoIP could replace that. This was also the early days of cell phones, and to ATT's credit, it was already embracing that technology. But by the early 2000s it became clear that VoIP and wireless were transformational technologies, and ATT began integrating them into its offerings. In 2006, ATT started to offer its own TV service called Uverse to compete with cable companies, and began offering its Triple Play strategy including VoIP calling, Internet access and television. Now ATT is looking to reinvent itself once again. While its early television offerings had some success, the firm realized that it needed a more serious offering, which led to its 49 billion acquisition of pay TV provider DirecTV in 2014. Seeing the growth of mobile video, ATT is in the process of launching a streaming TV service. Add to that ATT's proposed purchase of Time Warner, which if approved would give the firm a massive library of premium video content including CNN, HBO, TNT and more. Should the massive 85.4 billion deal pass regulatory muster, it would boost ATT's position as a modern media and telecommunications firm. ATT also sees connected cars as part of its vision, with 7 million automobiles in the U.S. already carrying the company's modems., These strategic moves are vital for ATT's future. But they're also important for the evolution of media and telecom firms more widely. ATT is no longer just a telecommunications company  it's evolving into a wireless communications and content delivery firm offering streaming media on any device. That makes it a greater threat to rivals like Verizon, Sprint and T-Mobile, all of whom may invest more heavily in content to compete. Verizon has already made moves in this direction, recently acquiring Internet firms AOL and Yahoo, but ATT's move could make it more likely to merge with a television provider, too., ATT is taking the integrated content-and-pipes approach because it recognizes people want their communications and content to be available on every device they own. As our research at Creative Strategies has shown, consumers want a wide range of services, but only one or two bills to deal with. With wireless services as well as content, ATT would be able to offer exactly that kind of package. The merger could also help ATT compete against powerful Silicon Valley firms, like Facebook and Google, which currently dominate the online advertising sector. ATT is no longer the ATT of our past. This new version is on its way to becoming one of the most powerful communications and content firms in the world. If its merger with Time Warner is approved, it will set the tone for what its rivals will need to do to compete.