AT&T breaks up--again

Jon A. Wiese, national vice president of sales and service for AT&T (New York, NY), said that the company`s recent announcement that it would be breaking up into three separate companies had created within the telecommunications giant a sense of loss and uncertainty. "But there is also a sense of elation, of excitement about the future," he added.

--Arlyn S. Powell, Jr.

Jon A. Wiese, national vice president of sales and service for AT&T (New York, NY), said that the company`s recent announcement that it would be breaking up into three separate companies had created within the telecommunications giant a sense of loss and uncertainty. "But there is also a sense of elation, of excitement about the future," he added.

Speaking at the recent BICSI fall conference in Tucson, AZ, Wiese explained his company`s strategic move as a response to market forces. "It`s been a decade of turmoil in the industry," he said. "With the breakup of the Bell system a decade ago, seven powerful regional Bell operating companies, plus other competitors, emerged. Competition has sometimes been frantic." Other factors affecting AT&T have been the global expansion of the telecommunications industry, deregulation by Congress and the introduction of new technologies such as personal communications services and wireless.

"In the past," Wiese said, "AT&T`s strategy has been to address the full range of the market. This led to 25 individual business units." The company`s board of directors, in assessing this situation, felt it would be wiser to focus the business. The result will be three independently operated companies, each traded publicly on the New York Stock Exchange.

"This was a bold move taken by the AT&T board," stated Wiese. "It was not forced on the board. Rather, it was taken to eliminate conflicts between operating units, to strengthen the company`s financial position and to provide quicker response to customers."

The network services company, which will retain the name AT&T, will include long-distance services, wireless services and part of Bell Laboratories, among other units. Its current sales are around $49 billion.

The communications products and systems company will include network systems, premises networking, microelectronics, Paradyne, consumer products and about 80% of Bell Laboratories. Its sales are around $20 billion.

The third new business unit will be AT&T`s computer company.

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