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AT&T speeds convergence

The telco is expected to launch a new high-speed service to let business customers combine their phone and computer networks.

AT&T is testing a major new high-speed communications service that will let many of its 10 million business customers cut costs by combining their phone and computer networks, the telco giant said.

It is expected to launch the service, code-named "AT&T Inc" for "Integrated Network Connect," within a month. But it won't actually be available to customers until 1999, sources close to the project said.

Sprint unveiled a similar service, called ION, three months ago.

The service that AT&T is testing is virtually identical, in that both use ATM (asynchronous transfer mode) switches, which allow the consolidation of voice and data traffic onto one line.

The rollout of the network would be a major step in AT&T chief executive C. Michael Armstrong's overhaul of the corporation and his efforts to "future-proof" the company.

Telephone companies recently have focused energies in trying to create high-speed Internet services after largely floundering as content service providers on the Net. The market to provide high-speed access is promising but competitive, with pressure coming largely from cable access services such as @Home.

An AT&T spokesman declined to comment on details about the project, but confirmed that the company is testing the addition of the ATM switches for business customers.

The result would be lines that could provide faster data traffic, said AT&T spokeswoman Kate Rankin.

"Last January, Mike Armstrong briefed analysts on the company's plans to future-proof our network and one of the examples he used was the idea of providing business customers with ATM switches that would allow them to consolidate voice and data traffic," Rankin said.

"At that time, he also stated we'd be testing this new approach throughout the year. The testing of the concept is under way. Other than that, we have nothing to add," she said.

Reuters contributed to this report.