New AT&T Business Company to Include Gov't Operations

By Jennifer Freer, Staff Writer




OCT. 26 ? AT&T Corp. plans to create four new companies and restructure the company by 2002 in order to better focus on specific markets, with the government business falling under the new AT&T Business company.



Details of the government business plans in the new structure are still being worked out, company officials said.



The company is breaking up into AT&T Wireless, AT&T Broadband (a cable TV and broadband services company), AT&T Business and AT&T Consumer. Each company will operate under the AT&T brand and become a publicly held company. AT&T shareowners would own stock in four businesses.



"This is a pivotal event in the transformation of AT&T we began three years ago," said C. Michael Armstrong, AT&T chairman and CEO. "We're combining the power of a common vision with the focus and flexibility of separate companies."



AT&T competitor WorldCom Inc. also is planning to split into two separate companies, according to a report by CNET News.com. The restructuring would separate WorldCom's sagging long-distance business from its other operations, according to the report.



Armstrong said AT&T's plan will not only give greater visibility to the market value of each of AT&T's individual businesses, but will free them to be more responsive to their specific markets and move more quickly to seize growth opportunities.



Each of these new companies will move faster in meeting customer needs, offer bundled services, employees will have better career opportunities, and the companies won't have to compete internally for capital, Armstrong said.



When all four companies have been established, AT&T's principal unit will be AT&T Business, which provides enterprise communications and networking. The company will trade on the New York Stock Exchange under the "T" symbol. It will also be the legal owner of the AT&T brand, which it will license to the other companies.



AT&T, which currently has about 160,000 employees, said that it does not expect significant downsizing to result from its plans, although it said each company will continue to size its operations to be as competitive as possible.