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AT&T to Buy IBM’s Network Business

In a move to increase revenue in its growing network services unit, AT&T Corp. (www.att.com) will acquire IBM Corp.’s global network business, which the company put on the auction block earlier this year, for $5 billion.

Accompanying the agreement are two outsourcing pacts between the companies. AT&T, in fact, will handle approximately $5 billion worth of IBM’s global networking needs over five years.

IBM, on the other hand, will provide applications processing and data center management operations for AT&T for $4 billion over 10 years. Big Blue will also manage AT&T’s data processing centers, which operate corporate information systems such as payroll and benefits.

Analysts speculate that the deal could generate as much as $2.5 billion in revenue for AT&T in the first year alone. --Thomas Sullivan Staff Reporter/Reviews Editor

About the Author

Scott Bekker is editor in chief of Redmond Channel Partner magazine.

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