(Source: Reuters/Shannon Stapleton)
Carrier is definitely seeing the "glass half full", when it comes to online malicious behavior
At Morgan Stanley's (MS) TMT conference in Barcelona, Spain, AT&T, Inc.'s (T) global enterprise unit president was brimming with excitement about something that puts a frown on the faces of most business leaders -- cyberattacks.
I. Creating Opportunity From Attacks
Mr. Jules, in his Tuesday speech commented, "We see them on a daily basis and they are now getting smaller instead of coming in huge waves, which were easier for us to detect."
But when it comes to getting attacked daily, Mr. Jules is turning that frown upside down, arguing that perpetual online battering is teaching AT&T valuable lessons that it can use to create a new security business, helping other corporations secure their digital real estate. He comments, "Every chief information officer at major corporations that I meet wants to talk about security. I think this will be a $40 billion market one day."
According to Reuters, Mr. Jules forecasts that security offerings could one day pull in as much as $1B USD in revenue for AT&T, worldwide.
AT&T hopes to grow its cybersecurity services into a $1B USD per year business.
[Image Source: Sypris Electronics]
The plan to apply its expertise into some sort of enterprise-aimed cybersecurities services or consulting business is part of a broader diversification strategy at AT&T.
II. Diversification is Key to AT&T's New Strategy
AT&T is currently best known for its wireless services. But while it is currently in a strong second place position, its future on the market is murky. The nation's largest carrier Verizon Wireless, a joint subsidiary of Verizon Communications Inc. (VZ) and Vodafone Group Plc. (LON:VOD), is trumping AT&T in LTE coverage, prompting AT&T to dig deep into its pockets and increase capital expenditures to try to catch up.
The third and fourth place carriers both are looking reinvigorated when, for a while, it looked like they might go bankrupt -- or get gobbled up by AT&T.
Softbank Corp. (TYO:9984), a rising power in the Japanese market, is set to take majority of ownership of Sprint Nextel Corp. (S) in early 2013 after a purchase plan announced in mid-October. The deal is worth $20.1B USD and is expected to strengthen the struggling third place carrier. And Deutsche Telekom AG (ETR:DTE) recently reached a deal to partially acquire MetroPCS and merge it with its struggling subunit T-Mobile USA -- currently in fourth place in the U.S. market.
AT&T's answer to the increasing competitiveness of the wireless market is to increase its efforts in other spaces. One prime example is its Uverse service, which provides bundled phone, cable TV, and internet. While still not available in many areas, Uverse has grown into a viable alternative to giants like Comcast Corp. (CMCSA). And AT&T's diversity makes its offerings more appealing, in a way, than traditional cable offerings, in that it can provide bundled discounts and special mobile video options to wireless service subscribers.
Comcast has looked to counter this, pairing with Verizon Wireless for wireless video, but AT&T arguably has tighter integration in that it's following a single cohesive business plan.
AT&T does not have a bad security track record when it comes to security. It was among the first carriers globally to offer comprehensive mobile malware protection for its subscribers. However, it remains to be seen whether AT&T can truly leverage that experience to grow a $1B USD new business, as it optimistically hopes.
"A politician stumbles over himself... Then they pick it out. They edit it. He runs the clip, and then he makes a funny face, and the whole audience has a Pavlovian response." -- Joe Scarborough on John Stewart over Jim Cramer
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