Global Communications Benchmarking

Global Communications Benchmarking

Introduction

The following paper will discuss how AT&T and Bell South faced specific issues related to those identified with Global Communications and connected with the organizational communication, emotional intelligence, and organizational commitment course concepts. Furthermore, the paper will discuss an issue identified in the Global Communications scenario that is also facing AT&T and Bell South. Finally, the paper will discuss how AT &T and Bell South applied the concepts in response to the issue, and the outcomes of AT&T and Bell South response to the issue.

AT&T

In 1995, AT&T was facing lower revenues and announced massive layoffs. AT&T was driven to get back into the local business and was looking to merge with a cable company in order to offer local customers better services. Ideally, customers would be drawn to a company that offered the very best in communications and broadband capabilities. The merger would bring AT&T, the largest long distance company and TCI, a cable TV company with the most subscribers in the country, together in 1998. AT&T addressed the need to enter the local business communications service market through Teleport Communications Group also known as TCG which was owed by TCI. By merging, "AT&T was able to reach an additional 20 million households through the broadband cable network and be a viable competitor for Bell companies (Online Focus, 1998)."

One of the main issues that telecommunications companies face is decreasing revenues. With the advances in technology and competition for customers the directors and marketing departments of companies have to be competitive to keep their companies ahead of the rest. It has become very popular over the years to merge with different companies to increase the numbers of customers, hence increase your revenue. During the late 1990's, it was common for local long distant companies to merge with other local long distance companies and cable companies to merge with other cable companies. AT&T took it a step further and was the first telephone company to merge with a cable company. They were taking a huge risk, but felt it was the right move to get the edge in the local markets. Additionally, they would have the most up to date technology and the ability to expand further in the future and be competitive in the residential market.

The outcome of these synergies started to show up the following year TCI. "The Headline read TCI Turns it Around (DIRECT, 1999)." TCI and AT&T were able to offer package services to its customers. The loyalty program allowed the two companies to offer even more than bundled services. Next they started exploring how they could tie the TCI Rewards program to AT&T long-distance. During the first year the new company saw reduced churn rates and improved service upgrade requests.

BellSouth

BellSouth Corporation is a Fortune 100 telecommunications services company headquartered in Atlanta Georgia, which serves more than 46 million customers in the US and 15 other countries. The company provides various local and long distance voice, broadband data, and e commerce solutions to residential and business customers. In the residential market BellSouth offers digital subscriber line (DSL) high speed Internet access, advanced voice features and other services. BellSouth owns approximately 40% of Cingular Wireless, a provider of wireless voice and data services. (Robinson, 2004)

Soon after the passage of the Telecommunications Act of 1996 BellSouth experienced a boom period and spent large sums of money to keep up with advances in the technology of broadband data delivery, wireless, and fiber optics in order to protect their lead against its competitors. In 2000 telecom companies began facing threats to their profits. A slowdown in economic growth caused stock prices to fall. BellSouth along with most telecommunications companies came under pressure to reduce capital and operating costs. (Robinson, 2004)

Even though Bellsouth entered early into the cellular systems, they lost many cellular phone deals to regional holding companies (RHCs). The area of cellular service was one where the RHCs could compete outside of their local territory. Losing these deals meant Bellsouth was limited on expanding its growth in the telecommunications market. In 1989 BellSouth faced competition with Bell Atlantic when they beat out BellSouth in competition for a multi-million dollar contract to build advanced phone systems to link government agencies in the Washington D.C. area. (BellSouth, 2007.)

The new competition BellSouth faced turned out to have some positive effects. In 1988 BellSouth bought Mobile Communications Corp. This acquisition made BellSouth the third-largest telecommunication company. The Mobile Communications Corp. purchase also gave BellSouth the opportunity for paging services business. Even though they lost individual accounts, BellSouth picked up the profit by selling wholesale access to its lines to the new competition who did not want to build their own. BellSouth had their Baby Bells offer 24-hour, seven-day customer service. They built up their brand name reputation by heavily relying on television and print advertisement building up their reputation. BellSouth sold wireless and regular telephone service to customers in the South throughout 250 stores or kiosks owned by BellSouth. Many of the kiosks were located in chains stores such as Office Depot, Circuit City and Radio Shack. In 1990 BellSouth won FCC permission to test a wireless telephone. For part of a cost-cutting measure, the company offered an early retirement incentive to approximately 3,000 executives. (BellSouth, 2007)

BellSouth began to look at ways go reduce operating costs. Offshore outsourcing of IT and back office services was particularly appealing to management. BellSouth chose Accenture to help improve service levels and customer service. In 1997 BellSouth signed a ten year contract with EDS to provide operational support to BellSouth. This was one of the ten largest outsourcing contracts EDS had ever won valued at $3 billion. In 2001, BellSouth again found itself in need of IT budget cuts and launched Project Horizon. Its business objective was to use offshore resources to reduce maintenance and development costs of IT applications while maintaining the same service levels. BellSouth chose India as the pilot site. One reason was that 60% of companies with best in class process maturity, CMM level 5, are located in India, more than 40% of Fortune 500 companies utilize India for application support, and the access to low cost highly skill