AT&T follows the money to Sydney

As part of a push to unify its global network services, AT&T has announced it will be expanding its capabilities in the region -- but only in response to competitors who are already here, according to one analyst.

The US communications giant announced its plans to invest US$1 billion in 2008 to expand its global network and service capabilities, in response to growing demands from its predominantly US multinational customer base.

As part of the expansion the company will be pushing its Ethernet network services to a further 14 cities worldwide -- including Sydney -- by the end of the year.

"Essentially what AT&T is doing here is playing catch up with Verizon," said David Cannon, telecommunications programme manager at research firm IDC.

"Verizon, AT&T, BT and Orange Telecoms all compete in the same space, they all need to service their multinational customers with an end to end consistency, and this is just a move on AT&T's behalf to ensure that happens," he said.

Cannon said that while BT tends to focus more on its business in Asia, Verizon and AT&T have sought a greater presence in the Asia-Pacific region as a whole, after Verizon expanded its operations substantially here just over a year ago.

"Sydney's a hub in the region, so it makes sense that AT&T would be expanding that service here, it has important customers such as GM that have a significant presence in Australia to service," the analyst said.

The telco announced it would also be building a new sub-sea fibre optic cable to Japan and mainland Asia as part of its new investments in the region.