American Telephone & Telegraph Co. yesterday picked veteran executive James E. Olson as its new chairman and accompanied his promotion by announcing an additional $450 million in price cuts for long-distance phone service.
The latest reduction and a price cut announced earlier will produce a $2 billion savings, trimming residential and business long-distance charges by 11.8 percent as of June 1, AT&T said.
The new price cuts, which were mandated by the Federal Communications Commission, reflect a reduction in AT&T's costs, including charges it pays to local telephone companies, as well as savings on AT&T's operations.
The promotion of Olson, 60, AT&T's president and chief operating officer, was expected. He succeeds Charles Brown as AT&T chief executive on June 1 and replaces Brown as chairman on Sept. 1, when Brown reaches the mandatory retirement age of 65. Olson, whose first job in the telephone business was summer work in 1943 as a laborer and cable splicer's helper, rose through a succeession of management jobs at AT&T, succeeding Brown in 1972 as president of Illinois Bell.
AT&T also announced a new attempt to spur its sales of computers and communications networking services by combining these "Information Age" businesses with its traditional long-distance operations under a single executive, Randall L. Tobias, 44. Tobias is chairman of AT&T Communications, the long-distance arm, and will be chairman of AT&T Information Systems. Robert E. Allen, 51, chairman of Information Systems, will succeed Olson as president and chief operating officer on Sept. 1.
Although Olson recited a list of AT&T computer and communications products that are leaders in their markets, he acknowledged that profits in this crucial new part of the company's business still are depressed by the slump that has gripped most of the computer industry. "We have not worked miracles. We have a ways to go," he said.
Beyond the industry's problems, AT&T has stumbled in its efforts to mold competitive sales and high-tech product development operations following the court-ordered breakup of its long-distance and local telephone monopolies in 1984, analysts say.
AT&T's strategy for out-dueling International Business Machines Corp. and other better-established computer firms in processing information relies on using its expertise in developing the products and software for complex communications networks, Olson said.
The combination of the Information Systems and Communications businesses under Tobias is an attempt to give AT&T business customers one point of contact with the company, Olson said.
"We will be a company that's easy to do business with," he vowed.