AT & T: Twenty Years of Change

I. Summary

AT & T is the largest long-distance telephone company in the United States. It

started in 1875 when Alexander Graham Bell received funding from a two bankers to

complete his telephone invention and in the following year he succeeded and patent it.

The first telephone exchange opened in New Haven under license from Bell Telephone

and it started the implementation of monopoly strategy. The telephone exchanges with

license from the company were set up in most major cities and towns in the United

States within 3 years and during those years they acquired majority interest in the

Western Electric Company and also acquired most of its license in the United States

that resulting the company became well known as Ma bell or Bell System. AT & T

became the parent company of the Bell System. AT & T had an agreement called as

Kingsburry commitment in 1913 wherein the past years while the new areas are getting

wired the competition is rapidly increasing as well as the number of telephones is

increased it caused no interconnection to all subscribers of different companies could

not call each other so that they agreed to connect with competitors to long distance

network and sell the shares of Western union stock. In 1974, US government filed an

antitrust lawsuit believes that a monopoly is valid in local exchanges but no longer in

long distance, it was settled in 1982 and agreed to divest itself of the wholly owned Bell

operating companies that provided the local exchange services that creates 7 baby

bells. The spinoff of lucent technologies was necessary, its include telecom network and
transmission of equipment business that cause the absence of synergies and

emergence of new competitors. The spinoff of NCR shows that the company strategy

was failing.

II. Time of context/period

1984-1997

Mission

AT & T hoped that the restructuring would attract new investors and provide cash

to reduce the enormous debt load that accumulated through various acquisitions.

Vision

, Transforming AT&T from a long distance company to an any distance

company. From a company that handles mostly a voice call to a company that connect

you to information in any form that is useful to you voice, data and video from a

primary domestic company to a truly global company.

III. Objective/s
To operate long distance calls
To target the convergence between communication and computers
To improve telephony and automatic switching
IV. Central problem

The baby bells phase analysis (1984-1997). The divestitureAT&T and the

regional bell operating companies and the AT&T strategy after the divestiture

V. Areas of Consideration (SWOT Analysis)

Strength Weakness

1. Still owned great technology
2. Going out of mature
segments
3. Advanced technological assets
1. Lost its ability to reach almost every
competition
consumer
2. Corporate culture needed re-invention to
match the new competitive environment.
3. Became a firm without a local network
 into offices and homes
Opportunities Threats

1. No longer restricted to the regulated 1. Long distance telephone services

business of national telephone and become competitive (market share

government work. dropped from 90% in 1984 to 50% in

2. Continued generating enormous positive
1996)
cash flows 2. Telecommunication act of 1996, allowing
3. Emerging technologies
baby bells and other competitors to

compete in long distance

3. Had to keep up with emerging

technologies

VI. Alternative courses of action

ACA Advantage Disadvantage

1. Creating seven baby
bells
2. Diversification strategy
3. Acquisition strategy
Build great technological Competition
Personal strength Decreased market share
Became more complex and Having insight into the
global competitors plans
Increased market share Resources are shared

VII. Recommendation/Strategy formulation

I therefore conclude that the best solution to the problem is the alternative course

of action # 3 because in the acquisition strategy could help the company to increase

their market share and also to fast growing their wireless communication.
VIII. Plan of Action
 Activity Person Time frame Budget Objective
Responsible Requirement
Meeting with President of the 1-2 weeks $350 To communicate
the other AT&T proposals
company
Build Spokesperson 1-2 weeks $1,000 To communicate
harmonious with other
relationship company
with other
company

IX. Potential problem

1. What if the consumer's has no ability to purchase phones outright?
2. What if there is no diversification occurred after the division of regional

bells?
3. What if the monopoly strategy did not fall?
X. Contingency plan
1. Needs work force flexibility in order to profit in the increasingly competitive

telecommunications marketplace.
2. Obligate to do more research for new design
3. Hire more researcher for the development