In the hands of the pros: Companies outsource services to AT&T, MCI WorldCom

As corporations spread their wings globally, many are focusing on their core business and outsourcing their telecommunications services.

As evidence, both AT&T and MCI WorldCom were awarded multimillion dollar contracts last week from companies seeking to integrate their existing multiple networks onto a single backbone. Each deal spans five years and six continents and calls for the carriers to design, build and manage global next generation networks that can accommodate voice and data.

AT&T Solutions was awarded two contracts valued at more than $500 million - a $350 million contract from General Motors and a $160 million contract from Delphi Automotive, a GM spinoff that focuses on automotive components and electronic systems technologies.

"IP-based networks enable the e-business strategies of both GM and Delphi, which are well under way and important to their core strategy of running their business," said Rick Roscitt, president and CEO of AT&T Solutions.

The companies currently use a network that consists of a mix of private lines and various technologies, he said. "We're going to upgrade this to an IP design," Roscitt said. "It will be uniform literally around the world."

Along with providing standard global voice and data networks, AT&T Solutions will streamline the operations of GM and Delphi by standardizing the platform with which they can develop their IP infrastructure. This will enable not only global networking, but AT&T also can offer a family of e-commerce applications in which GM is interested, Roscitt said.

The network also will accommodate a range of AT&T's business services and act as an integrator for capabilities from Concert - the AT&T/BT global joint venture - which will provide global transport for voice and data services. AT&T also will team with BT Syncordia Solutions to provide managed data, voice and video services in Europe, Asia and Latin America. "We are working very closely with Cisco Systems on a number of capabilities that are inherent in the data network design as well," Roscitt said.

Delphi will gain better management of information on a real-time basis, unify suppliers and customers and move into the e-commerce market.

GM chose AT&T Solutions because it wanted to reduce design-to-production intervals, achieve cost efficiencies and boost productivity. It also wanted to connect design facilities globally, allowing work to continue around the clock in various parts of the world, Roscitt said.

"We were looking for a single provider, a single point of contact," said Bob Chaffin, director of financing management for GM's information systems and services. "This whole deal fits together perfectly as a piece of GM's strategy of globalizing our corporation and as a piece of GM's e-business thrust."

In a separate deal, MCI WorldCom was awarded a $650 million contract with BP Amoco, an energy and petrochemicals group that also was seeking a "seamless, global platform," said Rob Wade, regional manager for MCI WorldCom Global Solutions.

MCI WorldCom will deliver integrated communication services to the company, including all voice and data services, Wade said. Voice offerings will include a virtual private network dialing plan that allows BP Amoco to connect its 1200 locations in 87 countries through seven-digit dialing. The carrier also will partner with BP Amoco on e-commerce and world strategy and link them to suppliers worldwide, Wade said.

The move to one network and one provider will allow BP Amoco to better leverage its services and providers, he said. "We could come in and consolidate and for first time, give them pictures of what they have in the world. From an asset management control, we could catalog all assets of mobile phones, pagers, PBXs [and] routers and give them a real-time view of what's where in the world at any location," Wade said.

For the first time, BP Amoco also will be able to see the cost for all voice and data services at one time, he added.

As networks continue to become more data-focused, the outsourcing trend for telecom services likely will continue, said Clif Holliday, president of B&C Consulting. "The complexity of the telecommunications infrastructure provisioning has really increased in the last two years," he said. "There are more options."

A few years ago, the main use for a fiber network was voice, with minimal need for data and video. Today, "the rationale for getting the network is data, not voice. [Companies] need networks that can efficiently handle IP data," Holliday said.