Top 100: Inside AT&T's big bet on public sector

Investment in the public sector, high-profile contract wins and a focus on helping government agencies modernize their information technology resulted in another successful year for AT&T.

“Our company is placing a big bet on public sector,” said Kay Kapoor, head of AT&T’s new Global Public Sector segment, which combines the company's federal, local and state government operations with its education and international public-sector operations. “Our recent reorganization is a tremendous opportunity for our company.”

Officially launched in April, the new division generates about $15 billion annually, promising to make it a major contributor to AT&T's annual revenue. The company holds the No. 14 spot on this year’s Top 100 list with $1.97 billion in federal prime contracts.

The new sector serves federal segments including civilian, defense, national intelligence and public safety; states, cities, towns and municipalities; and educational entities from kindergarten to higher education. The division also encompasses AT&T’s work on the First Responder Network Authority (FirstNet).

In March, FirstNet tapped the company to build and manage the first broadband network dedicated to communications among police, firefighters and emergency medical personnel. According to the 25-year agreement, FirstNet will provide success-based payments of $6.5 billion over five years to support buildout, although FedBizOpps estimates the network will ultimately cost $100 billion.

“Together with FirstNet, we’re going to deliver a dedicated interoperable network and ecosystem of devices and apps to give first responders the ability to communicate and collaborate across local, state and national levels,” Kapoor said. “The FirstNet initiative is a much needed investment in America’s communications infrastructure. This significant public/private partnership is expected to create 10,000 U.S. jobs over the next two years and shape first-responder communications for decades to come.”

AT&T’s priority with FirstNet is building and deploying the network on time and on budget, and to extend the communications capabilities to the entire public-safety community, she added. Plans for network-connected devices include automatic triggering of body-worn cameras when law enforcement officers draw their weapons, camera- and sensor-equipped drones assisting in situational awareness, and robots aiding in situations involving bombs or heavily armed perpetrators.

AT&T expects to get state plans to all 56 states, territories and Washington, D.C., this month, and is working with states on their opt-in decisions, Kapoor said.

“We expect to deliver ruthless preemption capabilities on our current 4G LTE network for primary users by the end of 2017,” she said. “This is significant because first responders will not have to wait for the entire network to be built to get this service.”

AT&T won other notable contracts in the past year. For instance, in December 2016, NASA chose AT&T to connect all the Deep Space Network antennas worldwide using a high-speed virtual-private network that will increase data transmission speeds threefold, and in August 2016, the Labor Department’s Wage and Hour Division awarded AT&T five-year contract to deliver mobility devices and voice and data services across the 4G LTE network.

More recently, the Interior Department selected AT&T for mobile device management services to help the agency control and support 27,000 mobile devices, and the Centers for Disease Control and Prevention awarded a contract for communications modernization.

Kapoor and her team are also looking to win a position on the $50 billion Enterprise Infrastructure Solutions vehicle, the follow-on to Networx and Alliant 2.

“We are eager to help agencies continue and improve mission delivery supported by innovative technologies such as software-defined networking, network function virtualization and, eventually, 5G capabilities,” she said.

Five other areas stand out for growth potential. One is the public sector’s increased willingness to buy commercial solutions. The second is the Internet of Things; more than 30 million devices are connected to AT&T’s network. For instance, the company is testing IoT solutions with the Air Force and Maxwell Air Force Base to improve perimeter and gate security, facilities management, and fleet management, all based on innovations it’s testing through its Smart Cities initiative, Kapoor said.

Software-defined networking is another trend driving growth. “In 2016, we started rolling out software-defined network capabilities that can help agencies transition away from hardware-based systems to more cost-efficient, flexible and scalable software based systems,” she said. “Without question, this is transformative for agencies. Agencies can scale network needs up or down based on consumption and pay only for what they use. Software-defined networking and network function virtualization is tomorrow’s networking architecture today. Over the course of the next decade, it is poised to become the foundation that supports mission delivery across government agencies.”

Cybersecurity and mobile solutions round out the rest of her list.

There are challenges, too, however. “A constant challenge across public sector is that agency leadership is continually changing with each election at the federal, state and local level,” Kapoor said. “Budgets are always tight and these customers are always challenged to do more with less. These become our challenges, too, because we really focus on being a strong service provider to our customers with the goal of working together. It is our duty to bring forward robust, yet affordable, technology solutions that help them address these challenges.”