SBC's Whitacre Calls For Mix Of Services

CHICAGO — Job growth in some vertical industries over the past few months is good news for telecom carriers trying to determine whether increased demand for services will hold up through the second half of the year, SBC Communications Inc. CEO Edward Whitacre told Supercomm attendees.

Whitacre said Tuesday (June 22)that service providers still must segment to serving vertical niches in order to insure profitability as data transport becomes a commodity business.

SBC may appear to be an all-purpose octopus, Whitacre said, challenging cable TV with its satellite TV service and "creative consolidation of wireless assets with BellSouth to form Cingular, and now the further addition of AT&T Wireless assets." Eventually, however, SBC will look far different from an expanded incumbent local carrier, Whitacre said.

"We are not just trying to become a bigger version of our old self," he said. "There's a limit to being just a phone company."

Similarly, he said, a cable TV operator, a satellite TV company or a wireless carrier must look at converged communications that can redefine them.On the regulatory front, regional phone companies should act in the aftermath of a recent federal court ruling that tossed out many telecommunication rules stemming from the 1996 Telcommunications Act, Whitacre said. In practice, he said SBC does not look any different to its customers in the aftermath of the ruling, but it is scrambling to upgrade its network with "last-mile" fiber-to-the-curb deployments in neighborhoods and digital switching upgrades in its core network.

The "fiber-to-the-neighborhood" option is far more economical and realistic than fiber to homes for delivering DSL, voice-over-IP, IP television and other converged services, he said.

SBC is investing close to $6 billion to deliver fiber-to-the-neighborhood in the next few years, Whitacre said.