AT&T execs reportedly ponder company split

By ADAM GELLER

Associated Press

NEW YORK – Analysts were divided today over whether AT&T Corp., the nation’s largest long-distance telephone and cable TV provider, will break itself into four freestanding companies.

The plan, dubbed Project Grand Slam, was reportedly under discussion today by company board members. A company spokeswoman declined comment on the reports, in The New York Times and The Wall Street Journal, but analysts who follow AT&T said some major change was imminent.

“I expect AT&T to announce something big on Wednesday and I hope that they go through with, yes, Project Grand Slam,” said Patrick Comack of Guzman &Co.

Others said AT&T was more likely to separate its consumer long-distance division from the rest of its business.

“That’s the most likely scenario,” said Drake Johnstone of Davenport &Co. “There are possibilities they may consider something more dramatic, but I wouldn’t put a high probability on that right now.”

The proposed plan would be the second time the company has been broken up since the federal government supervised the breakup of the Bell system in 1984. AT&T spun off Lucent Technologies and its NCR computer unit in 1996.

Rumors have swirled for several weeks about the future of AT&T, whose stock price has languished as the company struggles under the demands of a sweeping overhaul. Its market value has dropped by about $70 billion since January, partly because of falling prices in the long-distance industry.

Under the split-into-four proposal, AT&T’s wireless and cable TV operations would become separate companies over the next one to two years. The company’s more than 60 million telephone users would not feel much immediate impact from the plan.

The separate companies reportedly would specialize in business services, wireless, consumer long-distance, and “broadband” delivery of TV, Internet and phone services over cable lines.

The companies would be able to concentrate on their own strategies and grow more quickly. The largest and most profitable unit, Business Services, would become the new AT&T and would create brand-licensing and commercial agreements with the three other businesses.