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|2nd February 2005, 05:59 PM||#1|
Join Date: Sep 2004
The rise and fall of the world's largest company: AT&T
American Telephone and Telegraph
Once the world's largest company built by the inventor of the telephone, AT&T has been sold off for only $16 billion to a company that at one time it owned.
* 1877: Telephone inventor Alexander Graham Bell establishes the Bell Telephone Company.
* 1882: Renamed the American Bell Telephone Company, the fledgling firm acquires control of Western Electric Company. The two companies form the basis of what is later to become the Bell System.
* 1885: The American Telephone and Telegraph Company becomes a subsidiary of American Bell. It will build and run the nation's first long-distance network.
* 1899: AT&T becomes the Bell System's parent company. In less than 50 years it will control more than 80 percent of all U.S. local phone service, nearly all long-distance service and manufacture at least 90 percent of all phone equipment in the nation.
* 1949: The Department of Justice (DoJ) raises initial allegations accusing monopolist AT&T of violating the Sherman Antitrust Act.
* 1974: DoJ files an antitrust action against AT&T in an effort to break up the Bell System.
* 1982: AT&T agrees to divest itself of its local phone companies. Two years later, the local telcos are divided into seven distinct units known as the Regional Bell Operating Companies or "Baby Bells."
* 1984: The so-called Modified Final Judgement of the AT&T Consent Decree gives birth to a new, markedly smaller AT&T.
* 1991: AT&T buys computer manufacturer NCR for $7.3 billion.
* 1994: AT&T buys McCaw Cellular Communications for $12.6 billion.
* 1995: AT&T splits into three separate companies -- systems and equipment provider Lucent Technologies, computer manufacturer NCR, and telecom services provider AT&T.
* 1997: C. Michael Armstrong becomes CEO of AT&T and ultimately spends more than $100 billion buying up cable TV properties.
* October 2000: After months of watching AT&T's stock price decline, Armstrong decides to restructure the company into four separate units: AT&T Broadband, AT&T Wireless, AT&T Business and AT&T Consumer.
* June 2001: AT&T spins off its wireless telephone business, AT&T Wireless Group.
* December 2001: AT&T gets cable giant Comcast to fork over $72 billion for AT&T Broadband. The sale offsets much of the debt incurred by Armstrong's decision to acquire the cabelcos.
* February 2002: AT&T introduces a new consumer calling plan, the AT&T One Rate, which allows consumers to make unlimited calls for a flat fee. Long distance prices begin to drop to unprecedented lows.
* April 2004: After 65 years as part of the Dow Jones Industrial Average, AT&T is removed from the DJIA and replaced by rival Bell company Verizon Communications.
* June 2004: The Bush White House decides not to pursue Supreme Court review of a D.C. Circuit Court decision vacating FCC rules that allowed AT&T and other competitors to lease elements of the Bells' local networks at mandated wholesale rates.
* July 2004: AT&T withdraws from the consumer marketplace, contending that without rules guaranteeing local network access, it cannot compete against the Bells for local and long distance residential customers.
SBC Agrees to Buy AT&T for $16 Billion in Stock
Jan. 31 -- SBC Communications Inc., the No. 2 U.S. telephone company, agreed to buy AT&T Corp. for about $16 billion in stock.
AT&T investors will receive SBC stock worth $18.41 a share and a special dividend of $1.30 a share, the companies said in a Business Wire statement. SBC Chief Executive Officer Edward Whitacre, 63, will be CEO of the combined company.
The purchase marks the end of Bedminster, New Jersey-based AT&T as a 130-year-old company that brought telephones into American homes. SBC is buying a global phone network and business customers such as Lockheed Martin Corp. It's also buying a company whose sales have declined for five years.
"AT&T's customer base is a valuable customer base and certainly their name is well known,'' said Ivan Feinseth, a New York-based analyst for Matrix USA LLC, before the announcement. Still, "AT&T has struggled and destroyed so much of their value.'' He has a "buy'' rating on AT&T and doesn't own shares.
AT&T will have three seats on the combined company's board. AT&T shares, up 11 cents to $19.71 in New York Stock Exchange composite trading Jan. 28, have tumbled from a high of $102 in 1999. SBC shares fell 5 cents to $23.62 Jan. 28.
San Antonio-based SBC has grown from the smallest of seven local-phone providers spun off in the 1984 break up of AT&T to become a company with more than 50 million local-calling customers. Under Whitacre's 15-year reign, SBC bought local-phone companies Ameritech Corp. and Pacific Telesis Group.
AT&T's market value, which peaked at about $180 billion in 1999, has fallen to about $15.7 billion, as revenue plunged and it sold its wireless and cable-television businesses. SBC's market capitalization has grown to $80 billion.
SBC's agreement to buy AT&T may make MCI Inc., AT&T's top rival, a target of another local-phone company such as Verizon Communications Inc., said Jeffrey Kagan, an independent telecommunications analyst in Atlanta. The deal comes amid an increase in telecommunications mergers, including Sprint Corp.'s purchase of Nextel Communications Inc. and Cingular Wireless LLC's acquisition of AT&T Wireless Services Inc.
Dorman, who took the helm at AT&T two years ago, inherited a company that under his predecessor, C. Michael Armstrong, had racked up $65 billion in debt after spending $100 billion on acquisitions.
Dorman, 51, has spent the past two years slashing debt and eliminating jobs to make up for declining sales at AT&T, which fell 12 percent to $30.5 billion last year, the lowest level since before the breakup. AT&T's debt fell to $10.7 billion at the end of last year.
I read an article in Fortune magazine, and it said that all of the telephone equipment in America and much of the world was coming from the laboratories at AT&T. The problem with the new telephone industry is that no one has the incentive to make new technology, because then you've spent the money but everyone else gets the benefits.
|2nd February 2005, 06:41 PM||#2|
Join Date: Jun 2002
Re: The rise and fall of the world's largest company: AT&T
Bowel-shaking earthquakes of doubt and remorse assail him and wail him with monster truck force. - Cake, The Distance
Was there a second singer on the grassy Knowles? - Stephen Colbert
|2nd February 2005, 09:47 PM||#5|
Join Date: Sep 2004
who make cellphones. Thanks!