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AT&T Confirms 4-Way SplitAired October 25, 2000 - 1:13 p.m. ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
NATALIE ALLEN, CNN ANCHOR: We've all seen the television commercials: 10 cents a minute for long distance, seven cents, maybe even five cents. And now, it appears, those falling phone rates and other competitive pressures have forced the nation's best-known phone company to reverse its strategy of corporate growth. AT&T confirming today that it will split itself into four smaller independent companies, focusing on business services, the consumer telephone business, wireless service, and the broadband cable television business.
Steve Young from CNN Financial News joins us from New York to talk a little more about this.
And it appears, Steve, that this one-stop shopping strategy, just didn't work, is that right?
STEVE YOUNG, CNN CORRESPONDENT: Well, not according to CEO Mike Armstrong, but you would expect him to say that, Natalie, because he is a salesman, that at least is the mode that he is right now. In fact, he said on a conference call this morning that those who say he is abandoning his strategy, he finds that offensive. But one money manager told us he is offended that AT&T's stock has fallen so low.
At any rate, as you have indicated, the company is being slit up into four. It is real complicated. There is going to be what they call a tracking stock. Ultimately, there will be three boards of directors, ultimately by 2002. And Mr. Armstrong is going to head up the business unit of AT&T, which is going to be the parent of the consumer business, the long-distance business, which is now losing -- well, not losing customers, but losing growth. And growth is what Wall Street values the most.
By the way, that business, the business for corporate AT&T customers, will continue to bear the ticker, the stock symbol, T, the one that folks can now look up AT&T on. There the will be new tickers, we don't know what they will be yet for the other businesses. Although, the wireless now is AWE, though it ain't been so awesome measured by the way the stock is trading. And everybody is going to be using the AT&T name because that name is going to be licensed to all four companies.
ALLEN: And bottom line, Steve, what does this mean to customers?
YOUNG: Well, Mr. Armstrong says it means that the service is going to stay the same, or even be better, because it is going to be the same networks. But it doesn't seem that folks are receiving this very well. The stock, of course, the Nasdaq is way off at the moment. But the stock, instead of popping up, is now down more than $3. So there seems to be a lot of skepticism about whether this can be executed properly.
ALLEN: All right, Steve Young, waiting there for the official announcement from AT&T. Thanks, Steve.
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