(Part 2)


The 1982 breakup of the previously vertically integrated AT&T led to the divestiture of local service companies, resulting in seven regional holding companies, or `Baby Bells.’ The result of AT&T’s breakup was increased competition from the likes of Sprint and MCI. Two of the spun off regional holding companies, Bell Atlantic and Nynex, would later become Verizon, and US West would become Qwest.

AT&T operates across its main business segments: Wireless, Wireline, Advertising Solutions, and other. Its Wireless segment provides wireless voice communications services, including local wireless communications, long-distance, and roaming services with prepaid roaming agreements. This segment also supplies various accessories such as handsets, wirelessly enabled computers, and personal computer data cards. Its Wireline segment, which has previously been AT&T’s core business, has invested heavily in AT&T “U-Verse”, which offers high-speed internet, phone, and television services in one package. Its Wireline segment also offers voice services, which include local and long-distance, conference calling, caller ID, call waiting, voice mail services and more. The company’s Advertising Solutions accrues directory, local search, and Internet-based advertising through the publication of its White and Yellow Pages directories. AT&T also provides multi-enterprise collaboration services to businesses in various industries that include retail, financial services, manufacturing, healthcare, and telecommunication. (Yahoo! Finance 2010)

The company’s core strengths, weaknesses, industry threats and areas of opportunity:


– Largest provider of broadband in U.S.

– World’s largest communications holding company by revenue

– Broad portfolio of complementary products and services (wireless communications, local exchange services, long-distance services, data/broadband and Internet services, video services, telecommunications equipment, managed networking, wholesale services, and directory advertising and publishing)

– Extremely capable network capacity, both physical (fiber optics) and wireless (including a growing 3G network

– AT&T Wireless exclusivity with Apple’s IPhone

– Brand well known throughout multinational corporations

AT&T is seeing growth come from both wireless, and broadband/IP services. AT&T is also the largest provider of WI-FI hotspots. AT&T bought Wayport, Inc, in late 2008, bolstering its position as the largest provider of Wi-Fi hotspots in the U.S. AT&T has put a lot of time and money into mobile devices. In 2007, the company entered into the Smartphone industry through a profitable partnership with Apple. By September 2009, 50 million IPhone have been sold and over 20 billion applications were downloaded, granting AT&T a substantial recurring revenue stream. With the success of IPhone sales, AT&T jumped at the opportunity to enter data services business, which includes Web surfing and email use. With the company’s exclusive rights to the IPhone, AT&T added net 1.9 million wireless subscribers in the first quarter of the year, taking its total to 87 million subscribers.

AT&T is seeing promising results from U-verse, its integrated television, phone and internet service. The company has stimulated new revenue by adding millions of gadgets to its network that require a wireless connection, such as tablet computers, electronic-book readers and `smart’ energy meters.