AT&T plans $9 billion outlay this year to expand its network to new markets; stock falls 7.5% on forecast that short-term profits will be hurt by costs
Article Abstract:
AT&T plans to spend $9 billion in 1997 to compete in local service and Internet access markets, but the investment is expected to cut into short-term profits, causing stock prices to drop 7.5% to $36.875. AT&T plans to cut costs by $2.6 billion through restructuring and previously announced layoffs, but the 50% increase in capital spending, and an 8% to 15% decline in AT&T's core long-distance and wireless business earnings will cut into per-share profits. AT&T's spending will include leasing Baby Bell networks in much of the country, and expanding DigitalLink, AT&T's business service which allows outgoing local calls and is available in 60% of the U.S; outgoing calls support will be added by the end of 1997. AT&T spent $6.7 billion in 1996 on revamping its network, especially its signaling capacity. Analysts see AT&T in a critical position; the company must move aggressively to grow in the local service market, especially as other competitors move into long distance.
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1997
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Motorola Inc. and BCE venture slate venture
Article Abstract:
Motorola Inc agrees to form a joint venture with Northern Telecom Ltd, a unit of BCE Inc, to market cellular telephone network equipment. The deal reportedly will involve tens of millions of dollars and hundreds of employees. The companies plan to market equipment in North America and possibly in Europe. Both firms have been trying to sell equipment to Groupe Speciale Mobile (GSM), a European multinational digital network. Neither Motorola nor Northern Telecom has done well in previous efforts in North America: Motorola backed an industry standard called NAMPS (Narrowband Advance d Mobile Phone Service) which was not widely accepted, and Northern Telecom was late in entering North American markets. Meanwhile, AT&T and LM Ericsson moved aggressively, positioning themselves to dominate US markets for digital cellular network equipment.
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1992
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