Revival of the Fittest
22 Years After the Breakup, the AT& T Name Is Back on Top
AT& T, with corporate headquarters in San Antonio, once sold telephones and supplied local and long-distance services.
(By Toby Jorrin -- Getty Images)
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Tuesday, March 7, 2006
Just a year ago, the hallowed AT&T Inc. brand appeared to be in its twilight, on the cusp of being merged out of existence. Now, with a proposed $67 billion acquisition of BellSouth Corp., the AT&T name is about to retake its place as the biggest brand in telecommunications.
Though it's been hard to track the complicated handoff of the AT&T name in recent years, it's clear that the new AT&T is a far cry from the old "Ma Bell" company that was formed after Alexander Graham Bell invented the telephone in 1876.
Before the breakup of the monopoly in 1984, there was effectively one company, AT&T, which sold telephones and supplied local and long-distance services. That was before cellular phones and the Internet. After the breakup, AT&T became a long-distance phone company. The company reached its marketing heyday during that time, with its "Reach Out and Touch Someone" advertising campaign, which promoted relatively expensive long-distance calling.
"I think it's still a slogan that people still remember," said Eli M. Noam, professor of finance and economics and director of the Institute for Tele-Information at Columbia University. "What they managed to do was maintain a reasonable market share," even in the face of competition from companies like MCI Communications Inc.
In the late 1990s, AT&T for a brief period had a host of services under its umbrella. In addition to being the largest long-distance provider, it had a wireless operation, offered cable TV services, and sold dial-up and later high-speed Internet services. Over time, the pieces were spun off or sold.
By early last year, all iterations of the AT&T brand seemed headed for the dustbin of history -- again. In 2004, AT&T Wireless was subsumed by Cingular Wireless.
Cingular's parent companies, BellSouth and SBC Communications Inc., had proposed an acquisition of AT&T, leaving no apparent heir to the name. But as marketing experts predicted, after closing its merger last year, SBC ditched its three-letter acronym for the nationally recognized AT&T name, which it now calls "the new AT&T" in its advertisements.
"It is one of the classic American brands," Noam said. "It has clearly lost some of its strength in recent years, but particularly for older Americans, the Ma Bell stands for quality and reliability."
