- The board of AT&T was reportedly in talks Monday about breaking up the telecommunications giant into four smaller companies.
The goal would be to to wash out the red ink of its less-profitable consumer long distance business from the bottom lines of its other operations.
The proposal as reported by Dow Jones would split up AT&T into a wireless business (already tracked as a separate stock), a business services unit, a group of cable assets which may evolve into a single broadband company, and its competition-plagued consumer business.
Though AT&T has a large consumer base for its long distance services, the problems of being profitable in the highly-competitive market have dragged down AT&T's stock value. AT&T's stock price is half of what it was in January. It closed on Monday at $US27.63, up 63 cents, or 2.31% percent.
"Clearly, they have to do something, they're working on something, and I would point toward the trend where there is a more dramatic proposal after the next," says Marc Crossman, a telecommunications analyst for JP Morgan.
"They're evaluating everything now, that's why so many stories are hitting the papers," he says, referring to leaks to the press about AT&T's considerations.
AT&T has said it will announce its earnings on Wednesday, and is expected to discuss its future plans then.