AT&T - U.S. IP Telephony & UC Services Report Date: July 13, 2012

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1 Product Assessment: AT&T - U.S. IP Telephony & UC Services Report Date: July 13, 2012 Analyst: Whelan, Cindy Service: Hot Topics, Business Network and IT Services Market: Unified Communications & Collaboration, Business Network and IT Services - US Class: IP Telephony & Unified Communications Services (U.S.) Summary Current Perspective AT&T s IP telephony and unified communications services are threatening to competitors because the provider supports a suite of network-hosted, premise-based and managed services, backed by an extensive U.S. and international reach and a brand with global recognition. Most recently, the carrier launched its Unified Communications Solutions (UCS) offer, launched in January 2012 (please see AT&T Launches Cloud-Based Unified Communications Features, January 27, 2012), providing enterprise customers with a path to next generation unified communications and collaboration services. UCS consists of three elements: UC Voice is cloud-based IP telephony and unified messaging that was launched in the U.S. in late 2011; UC Central is a cloud-based client application that provides a single user interface for collaboration features that will be launched later in 2012; and Managed UC Solutions integrates vendor-specific solutions with AT&T VPN, SIP trunking, conferencing and security. AT&T backs its services with strong monitoring and reporting capabilities through its BusinessDirect portal, as well as professional services that include network and technology assessment, service architecture and design management, service development and deployment, operations and maintenance. AT&T sells its VoIP services to businesses of all sizes, but the carrier has a reputation for providing premium services that are most suitable for enterprise-class customers, giving competitors an opportunity to portray AT&T as an expensive solution for mid-size businesses. However, the AT&T brand is clearly a choice for companies ranging in size from large enterprises to mid-size businesses. Outside the 22 states where AT&T is the incumbent local carrier, other in-region incumbent operators will have an advantage targeting mid-market businesses and smaller customers. The table below details AT&T's IP telephony and UC product portfolios: IP Telephony Services Description AT&T Voice DNAManaged SIP-based network-hosted VoIP. AT&T IP Flexible ReachManaged IP trunking/integrated access offer that supports local, domestic long-distance and international calling. AT&T Business in a Box Managed turnkey voice and data service for small businesses or enterprises with branch offices in the U.S. Includes fully managed CPE, firewall protection and virtual private networking. Managed IP Telephony Fully managed, dedicated Cisco and Avaya based Unified Communications solution that can be located on the customer s premise or hosted in a data center. Unified Communications Solutions AT&T Unified Communications Integrated solution that combines real-time communication services such as chat, presence, IP telephony, audio/web Solutions conferencing and non real-time communication services such as . The solution is delivered across desktop, mobile and landline devices. AT&T Connect Enterprise-wide business application that includes integrated audio conferencing, web conferencing and video conferencing delivered from AT&T s global platform. AT&T Telepresence SolutionGlobal immersive and non-immersive videoconferencing offer available in 40 countries as a full-suite managed service, and in an additional 40 countries where customers own their own equipment. Strengths and Weaknesses Strengths AT&T offers an IP-enabled voice service for every segment of the market, from teleworkers to the largest multinational enterprises, and the carrier has offered VoIP solutions since AT&T is one of the best-known telecommunications brands in the world, and when it comes to selling to large domestic or multinational enterprises, AT&T has a name that gets it in the door. AT&T s UC solutions allow enterprise customers to phase UC features into their overall communications environment, preserving infrastructure investment where necessary and managing the process of transitioning and training employees on new features. Deployment options range from premisesbased solutions that can incorporate legacy equipment, to a hybrid mix of premises-based and network-hosted, to a fully hosted solution. AT&T UC Solutions support PCs and mobile devices, including smartphones and tablets that use the ios, Android, BlackBerry, and W indows Mobile operating systems. The bring Weaknesses As one of the world s largest service providers, AT&T has a reputation for designing and delivering premium services that target the world's largest corporations. Some competitors can take advantage of this by touting services that seem to have much lower prices up front, possibly hiding limited feature sets and extra charges until the customer is hooked. Other competitors specifically target smaller enterprise customers with relatively simple needs, using low-price VoIP services that offer fewer features, less options and limited quality monitoring and management which customers may consider sufficient for their needs. Several major carriers offer a shared trunking service option that lets multi-site enterprise customers share concurrent calling capacity among geographically distributed locations of an enterprise: locations are able to burst beyond the subscribed number of concurrent calls for their location by using idle concurrent calling capacity from their other offices. The feature potentially lets enterprises save money by managing the number of concurrent calling

2 your own device (BYOD) phenomenon is a big issue as employees rely on personal mobile devices for business tasks. W hen AT&T s UC Central launches later in 2012, it will include a mobile client that supports devices from vendors other than AT&T Mobility, although not all features may be supported across third-party wireless networks. AT&T eventually anticipates offering full support of all features across phones and tablets regardless of the underlying wireless provider. AT&T IP Toll-Free delivers inbound toll-free calls to U.S. locations. The service supports SIP-enabled features (i.e., SIP Refer, SIP Redirect), and interoperates across IP and PSTNbased contact centers. Interoperability with AT&T s Toll-Free Advanced Features and the ability to use AT&T Route-It! to control PSTN and IP network call routing allows customers to operate a hybrid environment. AT&T NetPROTECT call monitoring is available to AT&T IP Flexible Reach and Voice DNA retail customers, which reduces the risk of, and caps customer liability, in the event of toll fraud. packages, getting the maximum use from the packages purchased. AT&T has not launched a similar enterprise line pooling service. AT&T s Business VoIP Site Availability SLA could be stronger. The default SLA states that clients may be eligible for a one day credit if a problem from the AT&T network, dedicated access or CPE prevents customers from making calls for more than two hours. By comparison, CenturyLink customers may be eligible for a one day credit for affected units for outages of ten to 30 minutes; and Verizon offers a one day credit for affected units for every hour the service is unavailable. As the nation's largest carrier, many customers considering migration to VoIP will already be AT&T voice and data customers. AT&T will be selling customers on new technologies, but in many cases the carrier is moving its TDM customers to IP rather than adding new logos and new sources of revenue. Metrics AT&T s customer-facing W eb portal, BusinessDirect, streamlines customer self-service and provides detailed performance reporting for services. BusinessDirect gives AT&T Business VoIP customers an Administrator portal with access to reports, ebill, eorder, emaintenance and eservicing functions. The personal end-user portal lets individual VoIP users forward calls, view call logs, set up on-demand conference calling and listen to voic via any Internet connection. AT&T Consulting offers customers professional services options in many areas, including UC. W ithin its UC consulting practice, AT&T offers a series of service options that clients can mix and match to meet their needs, from establishing a UC roadmap to implementation and integration of Microsoft services. Network-based IPT/UCaaS Rating Service(s) Name: Geographic Reach: Platform: Access Options: Non-recurring Charge Monthly Recurring Charge U.S.: Voice DNA, UC Voice Voice DNA: AT&T Voice DNA is available in over 2,600 rate centers nationwide, including nearly 300 rate centers in the legacy SBC region and over 100 rate centers in the legacy BellSouth region. Voice DNA is available to 100% of AT&T s business access lines in its 22-state region, and more than 90% of business lines out-ofregion. UC Voice: Nationwide Voice DNA: Softswitch platform information not available. VoiceDNA can be purchased in conjunction with AT&T Business in a Box, where AT&T will deploy and manage a 12 or 24 port router with the following specifications at the customer site: integrated Ethernet switch with 12/24 ports of POE, an integrated Stateful Packet Inspection Firewall, CSU/DSU, internal modem for out-ofband (OOB) access, 6 analog ports (FXS), 2 line ports (FXO), outbound survivability, gigabit Ethernet LAN ports and W ifi. UC Voice: Cisco Hosted Unified Communication Solution Voice DNA and UC Voice: T1, T3, fractional T3, bonded T1, up to 100 Mbps Ethernet. Underlying transport for Voice DNA is AT&T MIS or AT&T VPN service, underlying transport for UC Voice is AT&T VPN or other MPLS-enabled dedicated transport. AT&T Voice VDNA will support dual/diverse access redundancy in AT&T Voice DNA Remote W orker: Provides AT&T Voice DNA features via AT&T High Speed Internet (DSL) connection, business grade DSL (from any provider), or via cable broadband with at least 128 kbps upstream bandwidth. AT&T Voice DNA for Small Business: AT&T High Speed Internet Pro (3 Mbps/512 kbps) or Elite (6 Mbps/768 kbps) DSL. Site survivability via PSTN failover is optional. Voice DNA: BVoIP Dial Plan Setup U.S. - VDNA Small Business: site setup, site installation (waived with 2- or 3-year contract. Setup charges also apply for Auto Attendant and Site Survivability options. UC Voice: Deployment and setup charges apply. Voice DNA: Based on feature packages and local/long distance calling plan selected. Voice DNA customers can choose from Standard, Enhanced and Premium feature packages, and can mix and match plan features for each location. AT&T Voice DNA Remote W orker site charges vary based on the

3 Buying and/or Leasing Options for CPE Handsets Included Per Seat Pricing Typical Contract Length Service Availability SLA Voice Quality SLA (MOS score) Underlying Transport SLA Other SLAs Rating Service(s) Name: Geographic Reach: PBX Vendor(s): number of workers and service options. UC Voice: Based on feature packages and local/long distance calling plan selected. UC Voice has three feature packages: Basic, Standard and Enhanced. Both options available. No IP PBX (CPE) services Access Options: Voice DNA: YesUC Voice: Yes 3 years Network Availability: AT&T MIS and MPLS PNT offer 100% network availability with credits kicking in one minute after an outage. AT&T offers IP Telephony/LAN Management customers that select the Advanced Management option a 99.9% service availability SLA and an on-time provisioning SLA for new orders and MACDs of 95% completed during a predetermined timeframe. Service Level Objectives (SLO) include a time to repair (TTR) of four hours for remote restores, eight hours for restores that require a dispatch, and Time to Notify of 30 minutes for problems defined by AT&T as Severity 1 and one hour for problems defined by AT&T as Severity 2. Site availability: Service Level Objective specifies that no problem stemming from AT&T Network, CPE or AT&T-provided dedicated access will prevent customers from completing all VoIP telephone calls for a period that lasts two consecutive hours or more. Customers may qualify for a one-day credit for the affected AT&T business VoIP site. AT&T caps credits at five in any calendar month for each business VoIP site, and 30 credits in a calendar year for each business VoIP site. The site availability SLA does not apply to remote sites. AT&T relies on the ITU R-Factor, an objective measurement of packet loss, latency, and jitter, for its VoIP call quality SLA guarantees. AT&T guarantees a minimum R-Factor of 70 (equivalent to about 3.6 Mean Opinion Score) for 95% of a business customer's U.S. VoIP calls as measured on an individual call basis, excluding calls that are ten seconds or less in duration. Credits for failure to meet AT&T s R-Factor objective start at 5% of its monthly VoIP charges, multiplied by the number of successive months the goal is not met (up to five consecutive months, for a 25% credit on VoIP charges). Managed IP Telephony/LAN offers SLAs for Availability and On- Time Completion of MACDs as well as service level objectives for Time to Respond and Time to Restore. Packet delivery at least 99.95%; - Jitter objective of less than 1 ms average; - Latency objective of less than 37 ms average round-trip latency PoP-to-PoP network-wide. On-Time Provisioning SLA - AT&T offers an On-Time Provisioning SLA for Business in a Box with IP Flexible Reach. The SLA specifies complete customer provisioning and testing within 75 calendar days from order entry. IP Flexible Reach, Managed IP Telephony IP Flexible Reach: approximately 173 U.S. markets in 36 states and the District of Columbia. Managed IP Telephony: nationwide and 59 countries internationally. Managed IP Telephony is available to customers of the following AT&T W AN Services: MIS Plus (MIS+/VoMIS) and IP Flexible Reach for U.S. domestic service; Enhanced Virtual Private Network Service (EVPN/VoEVPN), and Managed Router Service (MRS/VoMRS) with AT&T VPN (AVPN) and IP Flexible Reach for global service. AT&T IP Telephony/LAN Management customers must subscribe to an appropriate AT&T W ide Area Network (W AN) Service under a separate contract. IP Flexible Reach: AT&T has certified interoperability between IP Flexible Reach and Microsoft Lync as well as IP PBX platforms from Avaya/Nortel, Cisco, and Toshiba and others. IP Flexible Reach is compatible with all TDM PBXs and most key systems. IP Flexible Reach does not support on-net calls between different makes, software versions and models of IP PBXs; these calls may fail or be completed as off-net calls. Managed IP Telephony supports Avaya and Cisco IP PBXs. IP Flexible Reach: T1, T3, fractional T3, bonded T1, Ethernet, OCx. Requires either an AT&T Managed Internet Service (MIS) or an AT&T VPN service connection. IP Flexible Reach supports redundancy features including dual/diverse access and router and inbound alternate routing. Inbound Alternate Routing (IAR)

4 Non-recurring Charge Monthly Recurring Charge Buying and/or Leasing Options for CPE Handsets Included Per Seat Pricing Typical Contract Length Service Availability SLA Voice Quality SLA (MOS score) Underlying Transport SLA Other SLAs UC Services redirects incoming calls, intended for call completion at one IP Flexible Reach site to another pre-defined alternate AT&T IP Flexible Reach site when there is a busy condition or a service or equipment failure at the first location, or a failure of the AT&T network that does not allow call completion at the first location. AT&T s Alternate Destination Routing (ADR) feature can reroute calls on ring-no-answer or busy conditions. Provisioning diverse access to diverse sites or to a single site can be managed through network call allocation and ADR. IP Flexible Reach Set up fee. Managed IP Telephony Installation and maintenance custom priced depending on configuration. IP Flexible Reach - Calling plans based on the number of concurrent calls selected by the customer for each site, feature packages and the underlying transport service. IP Flexible Reach has three calling plans, all of which come with unlimited outbound on-net calling; the IP PBX vendor, model and software versions must be the same between locations for calls to be designated as on-net. U.S. Managed IP Telephony - Customers can choose between two levels of service Standard or Advanced. Monthly recurring charges for hardware and software maintenance and management. Unlimited software updates and moves/adds/changes/disconnects (MACDs) are included in the monthly recurring charge for Advanced Management. All other MACDs are charged on a per-occurrence basis. Monthly Recurring Charge for management is $8.50 per month per phone for Advanced Management option and $5.75 per month per phone for Standard Management option. Both options available. No IP Flexible Reach: No Managed IP Telephony: Yes 3 years Network Availability: AT&T MIS and MPLS PNT offer 100% network availability with credits kicking in one minute after an outage. AT&T offers Managed IP Telephony customers that select the Advanced Management option a 99.9% service availability SLA and an on-time provisioning SLA for new orders and MACDs of 95% completed during a predetermined timeframe. Service level objectives include a time to repair (TTR) of four hours for remote restores, eight hours for restores that require a dispatch, and time to notify of 30 minutes for problems defined by AT&T as Severity 1 and one hour for problems defined by AT&T as Severity 2. Site availability: Service level objective specifies that no problem stemming from AT&T Network, CPE or AT&T-provided dedicated access will prevent customers from completing all VoIP telephone calls for a period that lasts two consecutive hours or more. Customers may qualify for a one-day credit for the affected AT&T business VoIP site. AT&T caps credits at five in any calendar month for each business VoIP site, and 30 credits in a calendar year for each business VoIP site. The site availability SLA does not apply to remote sites. AT&T relies on the ITU R-Factor, an objective measurement of packet loss, latency, and jitter, for its VoIP call quality SLA guarantees. AT&T guarantees a minimum R-Factor of 70 (equivalent to about 3.6 Mean Opinion Score) for 95% of a business customer's U.S. VoIP calls as measured on an individual call basis, excluding calls that are ten seconds or less in duration. Credits for failure to meet AT&T s R-Factor objective start at 5% of its monthly VoIP charges, multiplied by the number of successive months the goal is not met (up to five consecutive months, for a 25% credit on VoIP charges). Managed IP Telephony/LAN offers SLAs for Availability and On- Time Completion of MACDs as well as service level objectives for time to respond and time to restore. - Packet delivery at least 99.95%; - Jitter objective of less than 1 ms average; - Latency objective of 37 ms average round-trip latency networkwide On-Time Provisioning SLA - AT&T offers an On-Time Provisioning SLA for Business in a Box with IP Flexible Reach. The SLA objective specifies complete customer provisioning and testing within 75 calendar days from order entry.

5 Rating Audio Conferencing: Web Conferencing: Video Conferencing (including Telepresence): IM, and Desktop Integration: Softphone support: IP Contact Center: Mobile Integration/FMC: Rating Sales Strategy: UC Professional Services: Type of Partner Status Achieved: UC Delivery Capabilities: Yes. AT&T Connect is an IP-based software application that supports audio conferencing. Yes. AT&T Connect is an IP-based software application that supports web meetings, webcasts, on-demand recordings, and seminars and virtual training. Yes. AT&T Connect is an IP-based software application that supports audio conferencing, web meetings, webcasts, ondemand recordings and seminars and virtual training. AT&T provides fully managed immersive and non-immersive video services in 80 countries. More information about AT&T's telepresence capabilities can be found at AT&T Telepresence Solution. AT&T supports Microsoft OCS/Lync and BPOS/Office 365. Yes, AT&T uses CounterPath's EyeBeam softphone application. AT&T offers hosted and managed contact center solutions that can be combined with IP Flexible Reach and IP Toll-Free services. AT&T IP Toll-Free is a managed VoIP solution that supports inbound toll-free service to U.S. locations. The service is available in 49 states and can also receive calls from Alaska and Canada. IP Toll-Free supports international call termination when used with a customer s W AN, and can support international origination and termination when used with AT&T s PSTN-based Global Inbound Service. AT&T Mobile Extension integrates with Avaya and Cisco IP PBX platforms, and supports the Android, Blackberry, ios and W indows Mobile device platforms, offering U.S. customers fixed/mobile service options. Customers can download VoiceDNA iphone software to use these mobile devices with the service. IPT and UC Sales and Service Delivery AT&T s unified communications goal is Any Network, Any Device; its strategy is to create an integrated service delivery environment that layers services such as voice, conferencing, messaging, video and other applications over IP, atop the carrier s CARTS (Common Architecture for Real Time Services) infrastructure, supporting all access technologies and end devices. AT&T supports a mix of network-hosted, premise-based and managed services, backed by an extensive U.S. and international reach and a brand with global recognition. AT&T Mobile Extension integrates with Avaya and Cisco IP PBX platforms, and supports ios, Android, Blackberry and W indows Mobile devices platforms, offering U.S. customers fixed/mobile service options. AT&T UC Lifecycle Consulting includes the following options: UC Strategy & Roadmap Create a phased roadmap for enterprisewide strategic Unified Communications (UC) planning, including business and use-case development. UC Readiness - Assess existing UC plans, architecture, design, and deployments. Determine operational and migration readiness, including capacity planning and network assurance prior to UC launch. Life Cycle UC Deployment Services - Life cycle or a-la-carte UC services including planning, architecture, integration, and optimization of multi-vendor environments. UC Voice Services - Life cycle TDM to IP-based voice migration services, from planning through architecture, integration, implementation and optimization. UC SIP Integration - Plan and integrate SIP solutions with gateways and network transport. UC Conferencing Integration - Architecture, design and integration of UC deployments with room-based conferencing solutions (Cisco, Polycom, Tandberg, etc.). Microsoft Technologies Consulting - Life cycle services supporting Microsoft Active Directory, Exchange, SharePoint, Microsoft Systems Center Operations Manager (MOM), directory and migration. Avaya Platinum, Cisco Gold This report is tagged to the following vendor(s): AT&T AT&T has more than 1,000 Technical Solution Designers and more than 100 Application Specialists qualified to work with customers on their IPT-UC deployments. All materials Copyright Current Analysis, Inc. Reproduction prohibited without express written consent. Current Analysis logos are trademarks of Current Analysis, Inc. The information and opinions contained herein have been based on information obtained from sources believed to be reliable, but such accuracy cannot be guaranteed. All views and analysis expressed are the opinions of Current Analysis and all opinions expressed are subject to change without notice. Current Analysis does not make any financial or legal

6 and analysis expressed are the opinions of Current Analysis and all opinions expressed are subject to change without notice. Current Analysis does not make any financial or legal recommendations associated with any of its services, information, or analysis and reserves the right to change its opinions, analysis, and recommendations at any time based on new information or revised analysis. Current Analysis, Inc Signal Hill Plaza, Second Floor, Sterling, VA Tel: Fax: +1 (703) Current Analysis, Inc. 2 rue Troyon, Sevres Cedex, Paris, France Tel: +33 (1)

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