AT&T Reorganizes

AT&T will reorganize its structure in to four business units including consumer, business, infrastructure and diversified businesses. The consumer business unit will combine all consumer focused wireline, wireless, broadband, and video units into a single business line headed by former wireless chief Ralph De la Vega. The business unit will focus on global enterprise markets and the diversified business unit will manage ancillary business lines including Yellowpages.com. The move was first reported and confirmed by the Wall Street Journal. De la Vega will be tasked with converging all consumer services into an effective “three screen” strategy. The goal of course is to create a consumer experience which leverages all of AT&T’s assets and creates a competitive advantage over their arch competitive rivals – namely cable companies. “The biggest impact of the reorganization will be on the cable companies, because they’ll face a more unified consumer offering from AT&T,” said Roger Entner, a telecom analyst at Nielsen IAG, to the Journal.

The move is not surprising. Cable companies have been competing quite well with telcos and for the most part, have always had a singular consumer focused sales organization. Baby bells like AT&T, despite massive attempts to reverse their legacy, still have vestiges of a monopoly utility mindset (with wireless services being a unique exception). Reorganizations like this are prudent, if they are done to address the absolute need to become market focused and competitively fit, and are not just window dressing. It’s no mistake that the former wireless chief now is in control of the consumer ship. Now, if he can only work a little iPhone magic on those depressing 2Q08 DSL numbers.