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Geoff Daily

App-Rising.com covers the development and adoption of broadband applications, the deployment of and need for broadband networks, and the demands placed on policy to adapt to the revolutionary opportunities made possible by the Internet.

App-Rising.com is written by Geoff Daily, a DC-based technology journalist, broadband activist, marketing consultant, and Internet entrepreneur.

App-Rising.com is supported in part by AT&T;, however all views and opinions expressed herein are solely my own.

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August 8, 2008 10:44 AM

If I Ran AT&T...; I'd Buy Skype

Welcome to the start of a new feature on App-Rising.com where I step into the hypothetical by imagining what I'd do if given the reins to run AT&T.;

From my new perch atop a multi-billion dollar corporation, my first order of business is to address the inescapable reality that the traditional landline telephone business is headed towards extinction.

In the last quarter alone, we lost 1.5 million phone lines. And because of the combination of consumers dropping landlines for cellphones and both cable companies and VoIP providers offering new competition, this trend doesn't appear as though it will abate any time soon.

Making matters worse is that once these customers are gone they're likely not coming back. So rather than allow this slow bleed to continue, I need to make a bold move: getting out of the landline telephone business.

This plan starts with buying Skype. There are multiple reasons for doing so:

- Skype has a strong brand.
- It has a built-in global user base.
- It's more feature-rich than AT&T;'s current VoIP offering.
- It's rumored eBay wants to sell so it should be available.

Next up, I'll convert all my landline telephone customers to DSL customers.

I'd equip them with modems and provide them both data and Skype-powered phone services for the same price they're paying right now.

Obviously this won't be simple or cheap to do.

First there's the cost of buying Skype, though it could probably be had for a couple billion and for a company with revenues of more than $100 billion, I think we can manage it.

The DSL speeds offered will probably have to be the slowest available, but then there'll be opportunities to upsell them to faster speeds.

There'll have to be some integration work done so that customers' phones still work with the new service, but once we crack that nut it should expand the base of customers further into the mainstream that I can market my Skype-powered VoIP services to.

To make this a success, there are massive education efforts that'll be needed to help customers understand what's happening and why it's such a great thing for them, but during this process there'll be opportunity to sell additional value-added products that can drive new revenue.

In the short-term there's no doubt this would be a huge cost, but in the long-term if it can help stave off the losses that currently seem inevitable, these costs will likely pay for themselves by the number of customers it can help retain.

And its a proactive policy that proves my commitment to delivering value to my customers, rather than squatting on the status quo and watching while the tub slowly drains of water.

Plus, by moving customers en masse to IP, it'll open up many new opportunities to sell new services to them. Today, there's not much you can sell a telephone-only customer other than cheaper long distance packages. But tomorrow once all customers are IP-enabled, there'll be many opportunities to drive new revenues through new services and applications.

This may sound like an extreme first step to take in my new role as head of AT&T;, but I believe quite strongly that if we ignore these megatrends we risk being left behind. So instead it's better to bite the bullet and get out ahead of the curve.

It's time for AT&T; to get out of the landline business, buy Skype, and embrace the future that broadband is bringing about.

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