|
|
 |
Sign Up: Free Daily Tech E-letter
|
|||||
AT&T Retreats From Tradition
Although the regional Bell companies have been able to sign up millions of residential customers, their ability to invade the lucrative business market is widely viewed as a greater challenge. "To the extent AT&T slows the rate of loss in its business franchise and maybe eventually stabilizes it, that may make eventually make them an attractive takeover candidate," Johnstone said. Yesterday, AT&T reported revenue of $7.6 billion for the second quarter, a decline of 13 percent compared with the same period last year. Revenue in its consumer long-distance unit was $2 billion, down 14.6 percent. The company reported a profit of $108 million (14 cents per share) for the quarter ended June 30, down from $536 million (68 cents) -- a decline of 80 percent. Shares of AT&T fell 8 cents, or less than 1 percent, to close at $14.24.
The decision by the regional giants to invade the long-distance market has proved to be devastating for AT&T, MCI and Sprint. SBC claims 18.4 million long-distance customers, Verizon 16 million and BellSouth 4.6 million. MCI, once the nation's second-largest long-distance company, recently said it had 15 million long-distance customers.
Although AT&T said it will no longer market traditional telephone service to consumers, it will continue its recently launched CallVantage offering, which allows customers to make calls over high-speed Internet connections. For $34.99 a month, callers can make unlimited local and long-distance calls. Verizon announced a similar offering yesterday. But AT&T and Verizon are competing in the Internet-based phone business against relatively unknown players such as Vonage and Lingo. For instance, Lingo offers unlimited local and long-distance service for $19.95 a month. Lingo's package not only includes unlimited domestic calling, but subscribers can also call most of Western Europe under the same flat rate.
Even if AT&T does not seek out new customers, it may be a long time before it loses its last residential consumer. Michael Pailen, 52, of Northeast Washington, said he is a lifelong AT&T customer because he has always received reliable service. He intends to continue using the company even if it is not actively competing for the business of people like him. "As long as their service doesn't change," Pailen said, "I'll stay with them." Several Washington area consumers said they were aware of AT&T's legacy as the phone company for everyone, but it doesn't mean much when it comes to choosing service today. "That was years ago. It's been a long time," said Delores Young, 60, of Adams Morgan, who uses Verizon for both local and long distance. "I use my cell phone for long distance. It doesn't cost 10 cents a minute or whatever. It's just free. It comes with my plan," said Arlanda Jones, 22, of Cheverly. "AT&T is too expensive."
About TechNews.com | Advertising | Contact TechNews.com | Privacy My Profile | Rights & Permissions | Subscribe to print edition | Syndication |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
