Major new physical facilities are also being added, including new subsea fiberoptic cable capacity to Japan and Asia, as well as in the Caribbean and the Middle East, to increase diversity and reliability, something that has been in the spotlight since the recent cuts of undersea cables in the Mideast. In addition, AT&T is adding new core MPLS routers in Europe, Asia and the US and expanding access to AT&T's global network by adding or increasing the number of MPLS-based network access nodes in Paris, Moscow, Kuwait, New Delhi, Kolkata, Japan, Seoul, Shanghai, Singapore and Guatemala.

AT&T is adding network connections in high-growth markets such as India, Australia, Russia Kygyzstan, Belarus, Mongolia and South America and enhancing its Ethernet network capabilities by rolling out global VPN local services in Frankfurt, London, Brussels, Paris, Amsterdam, Stockholm, Dublin/Cork, Milan, Madrid and Zurich in Europe; and Hong Kong, Sydney, Singapore, Tokyo in Asia Pacific. That will give AT&T a year-end 2008 Ethernet footprint in 39 countries.

In most instances, Salvage said, multinational companies are expecting AT&T to provide managed services that combines AT&T’s infrastructure with that of partners, but enables the customer to deal only with AT&T. “It’s like the business we announced in 2007 with General Motors – they asked us to take responsibility for all of their communications services, both for the legacy services and the transition/transformation to IP-based services,” Salvage said.

“Plus we are extending into managed applications like security and have started stepping into the whole area of unified communications. There is the recognition that major corporations have got to look to the really strong players in this area. They can’t leave these to chance, and they don’t want to do them in-house – that is incredibly costly, and the skills are becoming scarce.”

Economic issues aren’t dampening AT&T’s outlook, although Salvage admitted that the company is paying for this expansion in US dollars, which are currently weak on global currency markets.

“Clearly our costs are in dollars, from the standpoint of how we care for that, we budget accordingly,” Salvage said.

Video is helping drive some of the bandwidth demand, especially for content distribution, Salvage added. “We see this as being really a very exciting space,” he said. “Content distribution networks are an area we are looking to take advantage of. It’s going to be a big factor.”

That market will include high-end telepresence service working with Cisco Systems and Polycom, as well as lower-end collaboration, working with InterWise, the collaboration tool that AT&T purchased and has now rebranded as AT&T Connect.