AT&T's reset takes public sector with it
AT&T is refocusing itself on technology and connectivity now that the No. 23 company on the Washington Technology Top 100 is mostly exiting the media and pay TV markets. We asked two executives from AT&T's public sector arm how that reset affects their business and the core growth engines there.
It was only two years ago that AT&T cast itself as more than just a telecommunications provider given the acquisition of Time Warner to add content into a larger, more synergistic offering still based on connectivity.
AT&T the corporation is now sounding a different note that can be viewed through the prism of two significant deals: the sale of a significant stake in its pay television assets including DirectTV and the much bigger deal to spin-off WarnerMedia into a new standalone company with Discovery.
That adds up into a new story being told by CEO John Stankey to consumers, investors and other key stakeholders that sounded familiar for many decades: connectivity is the core of what AT&T does.
So where do the public sector and public safety network pieces of AT&T fit into that broader reset?
Jason Porter, president of AT&T Public Sector and FirstNet, sees the broader changes happening for the corporation as moving those units higher up on the overall agenda.
“It’s a doubling down, a reinvesting in Public Sector and FirstNet because of our ability to differentiate and our ability to grow new logos, the affinity we have across this space, opening doors into accounts that we hadn’t been in, in a long time," Porter told me.
AT&T comes in at No. 23 on the 2021 Washington Technology Top 100, down five spots from the prior year and on approximately $1.8 billion in prime contracts.
Public sector also has gone through a similar partial reset. In April, AT&T completed the sale of its now-former defense IT professional services business to Tyto Athene. But the cord is not completely cut as both companies are already collaborating on opportunities of mutual interest.
Jill Singer, vice president of defense and national security for AT&T Public Sector, said those partnerships will look one of two ways based on what makes sense in the individual situation.
“For those areas where AT&T might be prime on something like a DOD (Defense Department) 5G initiative or an enterprise IT-as-a-service initiative in defense, where we will sub with Tyto and they will be with us in delivering those capabilities,” Singer told me.
The reverse is also true, where AT&T is part of the team led by Tyto Athene.
“(If) it’s a heavy professional services-oriented opportunity in defense, we would look to Tyto to be a potential prime for us, where we could deliver our core connectivity and advanced technology solutions, and pair it up with Tyto as the professional services arm of it,” Singer added.
During the time that AT&T was also a media company, that sector was one of the three prongs in its strategy at the corporate level. Technology and telecommunications were the other two, but as Porter hinted at earlier they now take more precedence given AT&T’s broad reset.
But the AT&T public sector shop can still largely be viewed through a three-pronged strategy: the governmentwide Enterprise Infrastructure Solutions vehicle, the nationwide FirstNet public safety network and the ongoing 5G revolution.
Currently in year four, EIS is the avenue for federal agencies to transition their telecommunications infrastructures into the next generation. Deltek data indicates AT&T has pulled in approximately $158 million in task order spend and has won nearly three dozen of the fair opportunities it has bid on.
Many of the publicized awards are among civilian agencies, but Singer said DOD is also a user of EIS and is putting out opportunities to acquire predominantly unclassified services and wireline solutions. Acquisitions focused on wireless solutions generally go through other contracts, she said.
Three of the EIS wins Porter highlighted as significant for AT&T were in the departments of Treasury, Transportation and Homeland Security among others.
Here again, Porter pointed to AT&T’s approach from the corporate level as a significant reason behind the string of awards on EIS.
“We’ve invested $110 billion in our wireless and wireline networks from 2016 to 2020, and so now our Public Sector and FirstNet customers get the opportunity to take advantage of that investment, those advances in technology,” Porter said.
Then there is that FirstNet network as a second prong for what AT&T is doing in public sector and public safety. More than 16,000 agencies and organizations are subscribed to FirstNet, which means more than 2.2 million connections across the U.S. across nearly 2.7 million square miles.
FirstNet is now “over 90 percent complete” on the nationwide build as of the end of the first quarter, Porter said, which he said is “approximately a year ahead of schedule on that build.”
Prong number three is the ongoing 5G revolution in both the consumer market -- where AT&T has that capability in 14,000 cities and towns -- and in the public sector.
Core to AT&T’s 5G push in public sector is how the Defense Department is looking to operationalize that network architecture.
Singer cited smart warehousing, infrastructure operations and augmented prototyping as some of DOD’s main areas of interest. She said the intelligence and national security community also is looking at 5G closely, albeit naturally under a different construct.
“We’re not going to see a smart compound come up just yet for a classified customer,” Singer said. “But they are very interested in understanding the technology of 5G, edge features, the increased security, speed and performance as they prepare for their utilization of 5G.”
Beyond just the utilization of 5G, that and other related technologies in the public sector has a direct correlation with what is happening in the consumer/commercial market and informs both of those elements of AT&T as Porter sees it.
“We’re taking the lessons learned from our experiences with DOD to inform our roadmaps in the commercial sector as well,” Porter said. “It really is a great give-and-take and shows the importance of being in the public sector and being a leader in this space.
(A future episode of Project 38 will feature more from Jason Porter and Jill Singer on how AT&T Public Sector pulls in what the commercial/consumer side is working on, the overall model for investing in the company’s network and the future of work. Fair warning: we started our conversation with and went deep into topic number three, partly given Singer’s career in government prior to industry that included leadership roles in the intelligence community.)