TELECOM Digest OnLine - Sorted: AT&T Hangs Up - and Few Are Sorry to Say Goodbye

AT&T Hangs Up - and Few Are Sorry to Say Goodbye

RamaChandra Raju Bhupathiraju (
Tue, 01 Feb 2005 22:34:54 -0000

Tue Feb 1, 6:31 AM ET Op/Ed -

AT&T possesses a history that goes back to Alexander Graham Bell, but
few people are likely to mourn its demise as an independent
company. It was an overbearing monopoly before its breakup, and a
largely inept competitor ever since. Not since its early days has it
been much of an innovator.

AT&T's sale for $16 billion to SBC Communications, announced Monday,
is loaded with irony. The company, once so powerful it was known as
"Ma Bell," was swallowed by one of the "Baby Bells" spun off in the
1984 breakup. The child was more successful than the parent.

Even more telling is the price AT&T went for. In today's world, $16
billion is a pittance. Last week, Procter & Gamble agreed to pay
almost four times as much for a medicine chest of sundries known as
the Gillette Company.

SBC will keep the AT&T brand name, which is well known outside of
SBC's region -- indeed, all around the world. For business customers in
particular, the AT&T name is still valuable.

But the company SBC is buying, subject to approval by regulators, is a
shell of its former self. It's no longer dominant, no longer greatly
feared by competitors.

For much of its history, AT&T was the quintessential monopoly. It
had no competition for local service, no competition for long-
distance service and offered people few reasons to like it. Its
customers could choose whatever color telephone they wanted, the
saying went, so long as it was black.

Since its breakup, however, AT&T has done little but lose market share
to rivals and watch as long-distance prices plummeted.

Not that Ma Bell didn't try to compete and reinvent itself. Over the
past 20 years, it has been a veritable whirling dervish of
acquisitions and spin-offs as it tried to find a niche in the rapidly
changing world of telecommunications. It got into the wireless
business in 1994 only to bail out last year. It put together the
largest cable network, only to sell it to Comcast. At one point, it
saw a future in cash registers and bought NCR.

In the process of making all of these transactions, the company
churned through CEOs. It was always in motion, but never quite
arrived. While competitors found ways to thrive in such industries as
wireless and cable, AT&T never could. Even NCR prospered once it was
let go.

In a way, AT&T died long ago and spread its ashes to the winds.
Today, bits and pieces of what was once Ma Bell can be found in a
dizzying array of concerns, among them SBC, BellSouth, Verizon,
Cingular, Comcast, Lucent, Qwest, Agere and Avaya.

AT&T was once, arguably, the USA's most powerful company. Soon it will
be no more than a division of one of its spin-offs. It's unlikely,
though, that anyone but history buffs will really miss it.

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