AT&T Broadband forges new relationship

(Telephony) Convergys has contracted with AT&T Broadband to provide integrated billing and customer care services for all of the latter’s residential and commercial business customers beginning this year.

The expansion of services is covered in two separate agreements. The first is a seven-year deal that requires Convergys to provide converged billing services for the roughly 500,000 residential customers that receive local telephone service from AT&T Broadband in the 17 markets the company currently serves.

Convergys has been providing such services to the former Media One markets since 1998. These markets—in Boston, Atlanta, Los Angeles, and parts of Florida—were acquired by AT&T Broadband in June 2000. At the time of the acquisition they served approximately 122,000 cable telephony customers.

The second agreement calls for Convergys to provide similar services to AT&T Broadband’s commercial business customers for the next five years.

Convergys and its scalable Integrated Communications Operations Management System (ICOMS) became more attractive to AT&T Broadband as it attempts to further its reach into the integrated communications provider arena, according to a Convergys spokesperson.

“We got the business because our ICOMS billing solution is capable of handling all the elements—phone, Internet, cable TV—that AT&T Broadband wants to provide, with one system and one bill. This will help them provide a consolidated communications product or package to their customers,” the spokesperson said.

The fact that AT&T Broadband is expanding this relationship may have as much to do with its heritage.

“In the cable industry—and a cable company is primarily what we are—it’s not uncommon to outsource billing for a service. It’s been like that from the beginning,” said an AT&T Broadband spokesperson.

The expanded deals with AT&T could be very lucrative for Convergys. Currently, the 500,000 residential customers who receive their telephone service from AT&T Broadband represent just three percent of the company’s 16 million cable television subscribers. AT&T’s cable-telephony penetration is expected to grow to the point that the residential billing contract alone could represent an annual $93 million revenue stream for Convergys by 2004, according to Prudential Securities analyst Michael Turits.