Press Release

Network Convergence - No Longer a Promise, Now a Reality

84 Percent of Senior Executives View Convergence as Being Crucial to Achieving Their Strategic IT and Business Goals, but They Also Recognise There Are Significant Network Security Challenges

San Antonio, Texas, November 13, 2006

London, England - AT&T Inc. (NYSE: T) 48 percent of businesses have already implemented IP convergence in all or most of their business, nearly twice the number recorded a year ago, according to a new global survey conducted by the Economist Intelligence Unit (EIU) for AT&T Inc. (NYSE: T). In addition, the vast majority — 84 percent — of business leaders now recognise the centrality of convergence to their strategic IT and business goals, compared with only 45 percent in 2005.

The survey of 395 global senior executives, called 'Convergence Takes Hold in the Enterprise', reveals a maturing attitude toward convergence. While executives continue to expect streamlined network management and cost-savings as the primary advantages of network convergence, executives are also beginning to see beyond the bottom line. Around 70 percent of those polled cited "better collaboration with customers, suppliers and partners" and "better customer service" as recognised benefits of IP convergence, and 65 percent said they are focusing on using converged networks to launch and manage new applications.

The EIU white paper demonstrates that companies are prepared to make a substantial investment to reap the benefits of convergence. Almost three-quarters of respondents(72 percent) expect their firms to increase spending in this area by at least 10 percent over the next two years. But this is tempered by realistic concerns about security. When it comes to implementing converged applications, such as Voice over IP (VoIP), network-security fears are uppermost in executives' minds. According to the survey, 58 percent view network-security issues as the most significant challenge to implementing convergence.

To overcome these challenges, security plans and measures must be integrated throughout the convergence process.

As Tom Siracusa, director of VPN Strategy at AT&T explains, "Security for converged networks and services must be built in, not bolted on as an afterthought. A distributed model is needed that places security in multiple locations, from the edge, through the network and into the applications and databases."

Companies are also concerned that a shortage of expertise will impede the successful migration to IP networks. Nearly half of companies worldwide say that they lack in-house skills and experience in relevant technologies for handling IP convergence. "Companies will need to address this looming skills gap if they are to reap the full benefits of IP migration," says Denis McCauley, director of Global Technology Research with the Economist Intelligence Unit.

The EIU define convergence as the ability to deliver voice, data, and video applications over a single IP network.

The white paper is the first in the Network Convergence 2006 series of thought-leadership papers written by AT&T and in co-operation with the Economist Intelligence Unit. Subsequent papers in the series will explore specific issues of convergence and its implications for business strategy: network security, applications integration and enterprise mobility.

Free copies of the EIU research white paper 'Convergence Takes Hold in the Enterprise' can be downloaded from the AT&T Web site at:

Other white papers from AT&T and the EIU are available at:

Survey and Research Methodology
As part of the research for the paper, the Economist Intelligence Unit conducted an online worldwide survey of 395 senior executives across 51 countries and over 20 industries. The majority of respondents came from Western Europe (32%), Asia Pacific (30%), and North America (30%). Other respondents came from Eastern Europe, Latin America, the Middle East, and Africa. 63% of those polled hailed from large firms with annual revenue of more than US$500 million. The top five industry sectors represented by the survey respondents were professional services, financial services, manufacturing, IT and technology, and healthcare, biotechnology and pharmaceuticals. In addition to the survey research, the EIU conducted a series of one-to-one in-depth interviews with senior executives and analysts.

About the Economist Intelligence Unit
The Economist Intelligence Unit (www.eiu.com) is the business information arm of The Economist Group, publisher of The Economist. Through its global network of over 500 analysts, the Economist Intelligence Unit continuously assesses and forecasts political, economic and business conditions in nearly 200 countries. As the world's leading provider of country intelligence, the Economist Intelligence Unit helps executives make better business decisions by providing timely, reliable and impartial analysis on worldwide market trends and business strategies.

About AT&T
AT&T Inc. (NYSE:T) is a premier communications holding company. Its subsidiaries and affiliates, AT&T operating companies, are the providers of AT&T services in the United States and around the world. Among their offerings are the world's most advanced IP-based business communications services and the nation's leading wireless, high speed Internet access and voice services. In domestic markets, AT&T is known for the directory publishing and advertising sales leadership of its Yellow Pages and YELLOWPAGES.COM organizations, and the AT&T brand is licensed to innovators in such fields as communications equipment. As part of its three-screen integration strategy, AT&T is expanding its TV entertainment offerings. Additional information about AT&T Inc. and the products and services provided by AT&T subsidiaries and affiliates is available at http://www.att.com.

© 2006 AT&T Intellectual Property. All rights reserved. AT&T, the AT&T logo and all other marks contained herein are trademarks of AT&T Intellectual Property and/or AT&T affiliated companies.

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