June 27, 2001, 4:23 PM — Expanding on a year-old partnership, AT&T Wireless Group Inc. and America Online Inc. plan to offer cobranded mobile phone services for wireless data, e-mail and instant messaging, the companies announced today.
The deal calls for the two companies to offer cell phones customized for AOL services, building in access to e-mail, instant messaging and content, using AT&T's as-yet-unfinished GSM/GPRS (Global System for Mobile Communications/General Packet Radio Service) network. The new service and PocketNet handsets with AOL Instant Messenger capabilities built in are expected to be available in the first half of 2002.
Terms of the expanded deal were not announced. AT&T and AOL struck a deal last year to market services together.
"AOL needs to try to get their name out there without investing a lot in infrastructure," said Gene Signorini, a wireless industry analyst for market research firm Yankee Group Inc. in Boston. "And obviously, AT&T is looking to capitalize on the value of the millions of subscribers of AOL."
3G (third-generation) wireless services for AOL and AT&T appear timed more to AT&T Wireless' upcoming stock spin-off than it does to existing technological capability, another analyst said.
"Where are the handsets? Some of these (services) can be done on existing phones, but they are still building the network," said Shiv Bakhshi, research manager for wireless infrastructure at the International Data Corp. (IDC) research firm. "It's good timing for them to make the announcement. If I'm AT&T and I'm spinning off, it makes sense to make alliances, to stay in people's minds. The good thing is that they're saying they have the applications in order."