Let the high-wire act begin: to Henry Schacht, AT&T's equipment spinoff looks easy to run. It won't be
Article Abstract:
AT&T chooses Henry B. Schacht to lead the $20 billion equipment division that will be one of three companies formed by the AT&T. His mandate is to establish a solid structure and prepare a successor. AT&T plans to launch the new company, which will sell consumer products, switching systems, semiconductors and software, with an initial public offering of 15% of its stock, with the profits returned to the parent company to pay down debt. The future of the equipment company as a standalone is uncertain. The flagship product, the 5ESS switching system, generates $5 billion annually, but it faces declining US demand as more US carriers complete their installations and need less equipment. Revenue for the Network Systems div, which will be part of the new company, dropped 6% in 3rd qtr 1995, but sales of wireless equipment rose 50% in 1994 and 1995 and are forecast to outsell switching equipment by 1997. Analysts estimate that the equipment div's operating profit falls between 5% and 7%.
Publication Name: The New York Times
Subject: Business, general
ISSN: 0362-4331
Year: 1995
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In global sales, breakup plan will give units room to roam
Article Abstract:
AT&T's restructuring may improve its performance abroad by separating its role as an equipment provider from its role as a service carrier. AT&T earns 27% of its $75.1 billion in revenue from foreign operations. The equipment division may benefit from the breakup, because foreign service carriers deliberately chose to buy equipment from other companies rather than put money into a potential competitor's coffers. The tension between offering both services and equipment is most clearly illustrated in Europe, where AT&T's telecommunications unit competes to offer globe-spanning networks, while offering equipment to its competitors at the same time. AT&T's breakup may help it avoid situations that it has faced in the past where it was obliged as a service contractor to offer the best rates for services and products, but also had strong reasons for pushing AT&T products.
Publication Name: The New York Times
Subject: Business, general
ISSN: 0362-4331
Year: 1995
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AT&T sends a message to Washington, person to person
Article Abstract:
3,000 managers from AT&T went to Washington to lobby the Congress on the upcoming vote on a significant telecommunications regulations bill. AT&T is hoping to delay a vote on the bill so that the company has time to lobby against a newly-added provision that would allow the Baby Bell regional operating companies to enter the long distance market sooner than the long distance companies would prefer. The AT&T managers held a rally at Constitution Hall and watched a taped speech from the company's chairman. Then they spread out across Capitol hill to lobby members of Congress. Long distance companies such as AT&T had hoped that the House of Representatives would protect their interests when the Senate did not. House leaders are still negotiating on some parts of the legislation.
Publication Name: The New York Times
Subject: Business, general
ISSN: 0362-4331
Year: 1995
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