- US telco AT&T's board has approved a plan to break the company into four, the company announced on Wednesday.
Each company will retain the AT&T name under the plan, which the company hopes to complete by 2002. Two of the new companies -- AT&T Wireless and AT&T Broadband, representing the company's wireless interests and its cable television interests (including the Excite@Home Internet access service) respectively -- will trade as independent common stocks. AT&T Consumer, which includes the residential long-distance and WorldNet businesses, will be represented by a tracking stock, leaving the company's business services, AT&T Business, as its principal unit.
"This is a pivotal event in the transformation of AT&T we began three years ago," said AT&T Chairman and Chief Executive Officer C. Michael Armstrong in a statement. "It creates a family of four national service providers that will be even better equipped to bring American families and businesses a new generation of broadband communications and information services.
Armstrong continued that the new companies are intended to be more responsive to customer needs, while still providing the benefits of one-stop shopping.
"We're combining the power of a common vision with the focus and flexibility of separate companies," he said. "Each of these new companies will move faster in meeting customer needs, but they'll serve them under one of the world's most recognised and respected brands and they'll still be able to offer bundled services through inter-company agreements."
As examples of this, AT&T confirmed that AT&T Business customers would still be able to get bundled AT&T Wireless services, and that AT&T Business services would still be provided over AT&T Broadband's cable systems. Long-term commercial contracts will tie the wireless, broadband and consumer companies into buying their services from AT&T Business.
The company said that the board of directors' decision was unanimous. The company intends to file its exchange proposal with the Securities and Exchange Com-mission in the fourth quarter of 2000, and hopes to implement it as soon as possible afterwards. It is aiming to spin off AT&T Wireless as a publicly-traded company next summer, and to have an IPO for a tracking stock in AT&T Broadband within the same timeframe. That tracking stock is intended to be recapitalised as an asset-based common stock within 12 months of the IPO.
AT&T, in Basking Ridge, New Jersey, can be reached at http://www.att.com/.