AT&T Canada relaunches as Allstream
AT&T Canada today announced it would do business going forward under the corporate moniker Allstream, a transition that was not expected until September.
Vice Chairman and CEO John McLennan said in a press conference today at the company’s Toronto headquarters that the relaunch was moved up to take advantage of the company’s successful restructuring that concluded in April. The relaunch will cost the company between $15 million and $19 million ($20 million and $25 million CDN), but is budgeted, said McLennan.
“The company has been on an incredible journey over the past 24 months. We held onto our customers, maintained our revenues and established a stronger economic platform while undergoing the restructuring,” McLennan said. “Doing the relaunch now is very exciting and a great opportunity to strengthen our position in the marketplace.”
AT&T Canada emerged from its restructuring with no long-term debt and about $104 million ($139 CDN) in cash on hand. The carrier posted net income of $27.3 million ($36.5 CDN) in the first quarter 2003, compared to a $39.7 million ($53.0 million CDN) loss in the year ago quarter. McLellan said the company had about $131.0 million ($175 million CDN) in cash on hand at the end of the quarter and would be cash flow positive for the full year.
“This launch represents the next step in the evolution of our company,” he said. “We have never been better positioned to grow profitably. This company has delivered on everything it set out to do over the past two years.”
The name Allstream was chosen because it reflects the carrier’s focus on providing complete solutions to a customer base that consists primarily of businesses, by offering a “world-class portfolio” of connectivity, infrastructure management, and IT services, said John MacDonald, president and chief operating officer. “We’re not just basic telecom services. This goes beyond data and voice,” MacDonald said.
Allstream will focus its efforts primarily on Canadian-based multinational companies with global networking requirements and to U.S.-based multinationals with networking requirements in Canada. Multinationals represent a crucial segment for Allstream; the carrier has about 110,000 total business customers, but 80% of its revenues are generated from just 4000 companies.
McLennan said Allstream would continue its relationship with the U.S.-based AT&T. “Last week, AT&T said it would still be a large customer of Allstream,” he said. “Everyone expects that AT&T will take its revenue and head down the road with it. That’s not going to happen.”
McLennan said Allstream currently operates 4ESS switches that connect seamlessly with AT&T’s 4ESS switches--“People don’t make [those] switches anymore,” he said--and has an extensive network across Canada, factors that give Allstream a competitive edge in terms of continuing its relationship with AT&T. “We can fulfill orders in a way that other [Canadian] carriers cannot.” McLennan said.
Allstream will invest about $140 million in capital expenditures this year, almost all of which will go to disruptive technologies such as packet-based solutions. Though there is no current plan to invest in fixed wireless and Wi-Fi, the company said those are two of the disruptive technologies it is considering.
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