AT&T in 2005: Merging with SBC
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Case Details:
Case Code : BSTA132
Case Length : 15 Pages
Period : 1876-2005
Organization : AT&T
Pub Date : 2005
Teaching Note :Not Available Countries : Global
Industry : Telecommunications
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Please note:
This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Excerpts
AT&T
Early History
Following the invention of the telephone by Alexander Graham Bell in 1876, Bell
Telephone was established in 1877 and New England Telephone in 1878. The two
companies were consolidated as National Bell Telephone in 1879...
SBC
SBC was the number two local phone company in the US, after Verizon. A Fortune 50 company, SBC along with its subsidiaries, provided a full range of voice, data, networking, e-business, directory publishing and advertising, and related services to businesses, consumers and other telecommunications providers...
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The Merger
In January 2005, SBC announced that it was merging with AT&T for $16 billion. For AT&T, the merger represented the next step forward in a series of mergers and breakups the company had been going through, since the early 80s. For SBC, the combination promised immediate global leadership in the enterprise segment where corporations and governments required complex communication solutions and services and access to advanced national and global networks...
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The Road Ahead
On February 1 2005, SBC outlined its plan to meet its cost-cutting targets. In a presentation given to Wall Street analysts, SBC executives described plans to cut 13,000 jobs, or about 12% of the combined 163,000 work forces at SBC/AT&T. Many of those cuts were likely to occur through attrition.
Around 5,125 job cuts were planned in network operations departments including engineering, access, management and enterprise customer service. Another 5,100 redundant sales and business operations posts would be eliminated. |
Exhibits
Exhibit 1: AT&T - SBC, Combined Strengths
Exhibit 2: Combined Company's Strategic Profile
Exhibit 3: AT&T - SBC, Profiles
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