Fleet to Link Its Offices Via AT&T Satellite Net
The newly expanded Fleet/Norstar Financial Group announced plans for a satellite communications network that the banking company says will save it $5 million over the next five years.
Fleet executives, who this week completed acquisition of the failed Bank of New England, said a division of American Telephone and Telegraph Co. will design and install a satellite-based communications network to link computers in Fleet's branch offices with its main data center, in Albany, N.Y.
The price of the contract was not disclosed.
Fleet officials had previously estimated to the Federal Deposit Insurance Corp. that they would save $90 million by consolidating the back-office operations of Bank of New England. The projected savings from the AT&T contract were not included.
Bank officials suggested that deals such as this one are what will make the merger more than just a break-even proposition for Fleet, now New England's largest bank, with $48 billion in assets.
"This is the kind of thing that will make us profitable down the road," said Michael R. Zucchini, chief technologist at Fleet, which is based in Providence, R.I. "And we're going to see more of it as the consolidation takes hold."
Satellite Links Spread
In the last year or so, low-priced satellite communications networks - such as the ones offered by AT&T Tridom, located in Marietta, Ga., and GTE Spacenet, based in McLean, Va. - have begun to cut in on the business of companies that lease out land-based telephone lines.
According to some estimates, the increased competition has driven down the cost of leasing a land line by as much as 80%.
Fleeet officials said savings and performance make a satellite link an obvious choice for a bank that has just expanded.
Though land lines "have been meeting the competition on price lately," Mr. Zucchini said, "we went with the [satellite] hookups because reliability and how quickly we could add new functions to the network are significant issues to us." AT&T guarantees 99.5% service reliability from its satellite networks.
Nine hundred the bank's 1,300 offices will be on the network by the end of this year.
Most of the 900 will be branches; the satellite network will carry data in support of the bank's teller and platform systems, automated teller machines, and alarm systems.
The remaining 400 offices, which handle a wide range of back-office tasks, such as check processing, will continue to communicate with the data centers through high-speed land lines.