Troubled Times at AT&T



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Code : COM0075

Year :
2005

Industry : Telecommunications

Region : USA

Teaching Note:Not Available

Structured Assignment :Not Available

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Introduction:American Telephone and Telegraph Company (AT&T), a US-based telecommunications company was the pioneer of global telecommunications. It had its presence along the industry value chain until its breakup in 1984 to form the Regional Bell Operating Companies (RBOCs) and AT&T. AT&T with a revenue of $60,326 million in 1984 had to face competition from the RBOCs in the deregulated US telecom industry since then. AT&T adopted contemporary technologies and marketed the telecom capacity that has become a commodity andmaintained its leadership in the long distancemarket of US since its breakup. However, by 2003, AT&T reported revenues of $34,529 million compared to $ 69,351 million in 1993.

By 2004,AT&T earned half of its revenues charging the long distance calls and the business customers of the company contributed to 60% of its revenues. Moreover, in 2004, AT&T exited its residential consumer business in seven US states and sold its subsidiary AT&T Wireless to Cingular. In 2004, experts predicted that the new communication technology, VOIP would irreversibly reduce the revenues of AT&T obtained through long distance calls at 20% per year..

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