<font color=red>TLCP/TTEL under eventual buyout by AT&T (AWE )FUTURE IS BRIGHT:
AT&T IN THE NEWS *** AT&T WIRELESS HAS HIDDEN ADVANTAGES - [Forbes Magazine, online, 6/12/2000.
forbes.com
The April offering of a tracking stock for AT&T's wireless
unit was the biggest stock offering in U.S. history. The offering of 360
million shares (15% of the company) raised $10.6 billion. The tracking
stock doesn't look like a winner, but there are 12.5 million reasons not to
sell it short -- namely, the subscribers. Despite spending $3.6 billion
since 1998 to build out its network, AT&T still loses nearly a third of its
customers each year to the competition, estimates Mark Lowenstein of the
Yankee Group. That's about average for the industry. But AT&T can afford
to keep pouring money into the network and it will do so. It will use half
the proceeds of the AWE share sale, and it also has at its disposal $1.1
billion in operating income (net before interest, taxes, depreciation and
extraordinary charges). Apart from trying to make busy signals a rarity,
Chief Technology Officer Roderick Nelson plans to put another $1.5 billion
into a new technology called Edge, which will deliver high-speed data. That
is planned for completion by 2002. Carriers like Bell Atlantic and Sprint
are well positioned to benefit. Their code division multiple access, or
CDMA, technology is more easily adapted for high-speed data.
Yet AT&T's network has some hidden advantages.
For starters, its operating costs are
lower than those of its rivals, Nelson says. In addition, while the rivals
try to add mass by targeting soccer moms, AT&T has deliberately focused on
higher-end users like business customers. The result: AT&T's subscribers
generate an average $66 in revenue per head per month, $14 more than the
industry average. Those 12.5 million subscribers become a trump card as the
wireless industry goes global, says Andrew Cole, a VP at Renaissance
Strategy, a global telecom consulting firm. "Carriers will have to compete
on price. To do that they need scale -- tens of millions of customers."
But when it does build out its next-generation network, eventually replacing
TDMA (time division multiple access) with Edge, AT&T's technology will be
compatible with most of the cellular networks outside the U.S. The rival
CDMA networks won't. That could help AT&T tap into a lion's share of the
world's predicted 1.2 billion wireless users by 2005.
=====================================================
Message 13913656
(BUSINESS WIRE)--June 20, 2000--The Universal Wireless Communications Consortium (UWCC)
applauds the June 19, 2000 announcement by AT&T Wireless to convert their newly acquired San Diego, Calif.,
and Houston, Texas, wireless networks
from CDMA (Code Division Multiple Access) to TDMA-EDGE networks
(Time Division Multiple Access-Enhanced Data Rates For
Global Evolution).……………
…………….
…………..…………… Board Members of the UWCC include: Alcatel USA, AT&T Wireless Services (USA),
BellSouth Cellular Corp. (USA), BCP S.A.
(Brazil), Cable and Wireless (United Kingdom), Cellcom (Israel), Celumovil (Colombia),
Compaq Computer Corporation, Ericsson Radio
Systems, Hughes Network Systems, Industar Digital PCS (USA), Lucent Technologies,
Mobikom SDN, BHD (Malaysia), Motorola,
Movilnet (Venezuela), Nokia, Nortel Networks, Rogers Wireless (Canada),
SBC Wireless (USA), Sony, Telecom Personal (Argentina),
Telefonica Unifon (Argentina), and VimpelCom (Russia).
======================================================
Message 14126071
Is AWE overpriced compared to QCOM PCS? You bet.
It is flying higher. The market has spoken:
siliconinvestor.com
=======================================================
AT&T studies CDMA option despite AWE beind hell bent to go EDGE.The best odf all worlds:
Message 13923720
==========================================
Future of AWE ( and TLCP & TTEL seems bright under new CEO Zieglis:
public.wsj.com
"One of the few AT&T executives with a secure future would seem to be
AT&T board member John Zeglis, 53. Mr. Zeglis, AT&T's former
longtime general counsel, was one of a few board members willing to
voice concerns about Mr. Armstrong's big cable gamble a few years ago,
and it now appears that many of his concerns were well founded. He is
also one of the few remaining top executives to have seen AT&T through
two previous breakups.
Mr. Zeglis is president of AT&T and CEO of AT&T Wireless. Under
the current plan, he would continue as chairman and CEO of AT&T
Wireless after it is spun off. The move stands to put Mr. Zeglis
exactly where Mr. Armstrong had hoped to be right now -- heading a
fast-growing company with a bright future. "
======================================================
October 26, 2000
Armstrong Loses Bet on Cable
With AT&T's Planned Breakup
By LESLIE CAULEY
Staff Reporter of THE WALL STREET JOURNAL
AT&T Corp. probably needed a little less vision and a lot more focus.
Wednesday, AT&T's chairman, C. Michael Armstrong, conceded as much.
He announced that growth in the company's core phone business had slowed
faster than he had anticipated. As a result, he said, instead of his original vision
of a one-stop shopping telecom mecca for phone customers, AT&T will be better
off split into four separate businesses "combining the power of a common vision
with the focus and flexibility of separate companies."
As he spoke to analysts in New York, Mr. Armstrong put a positive spin on his
latest attempt to right AT&T. "This is a pivotal event in the transformation of AT&T
we began three years ago," he told them.
But nobody was buying that view this time around, especially Wall Street and AT&T's
once-loyal investors. And many observers speculated that Mr. Armstrong and his
lieutenants won't be around to see his latest plan completed.
"What the market said today is that Armstrong's strategy in any form
whatsoever -- even breaking up the company -- continues to be a failure.
And the market voted with its feet" Wednesday by driving down AT&T shares,
said Brian Bruce, director of global investments for PanAgora Asset Management Inc. in Boston,
which has held AT&T shares.
"Today's announcement is simply window dressing" and yet another example of how
Mr. Armstrong "continues to be incredibly ineffective," he said.
Back in 1997, when Mr. Armstrong had just been appointed AT&T's chairman
and CEO, Wall Street considered him a hero for his visionary thinking. He had
wasted no time declaring that the company's 100-year-old long-distance business
-- the cash cow that was producing $8 billion in profits before taxes and interest
expenses -- was all but dead. Within months, Mr. Armstrong announced plans to
transform the American icon into a broadband behemoth. He snapped up $115
billion in cable-TV assets and piled up $61 billion in debt, grabbing headlines every step of the way.
The original plan for cable telephony was "a good vision. The only problem was
it was too expensive and these companies that AT&T bought weren't ready to
operate as telephone systems," says Nicholas Economides, an economics professor
at New York University's Leonard N. Stern School of Business.
"Wall Street bought the vision of cable telephony. They didn't mind that all
this money was being spent," says Mr. Economides, a telecommunications-industry expert.
Unfortunately, the original projections were too optimistic. "If there is a failure
[by Mr. Armstrong], it is that he didn't do things as quickly as he promised,
and that's something Wall Street doesn't forgive."
In retrospect, promising a slower approach, with a little more focus on the
core long-distance business, might have made some sense.
That was the approach of Louis V. Gerstner Jr. when he arrived at the top
of a badly broken International Business Machines Corp. in the summer of 1993.
At the time, IBM shares were down sharply, and its core mainframe business had
been pronounced dead on Wall Street.
Instead of trying to woo investors with vision, Mr. Gerstner stood his ground.
"The last thing IBM needs right now is a vision," Mr. Gerstner famously declared
that summer. Then he devised strategies for each of IBM's businesses, including
the ailing mainframe unit, and stuck to them. Mr. Gerstner turned out to be right,
and today IBM is considered a turnaround success story.
To be sure, mainframes and long-distance telephone service aren't the same thing.
But both were threatened by competitive new technologies, and IBM's experience
raises a legitimate question about whether the long-distance business could have been saved.
AT&T's approach was less focused. Its waffling wreaked havoc on the company's
share price, which hit a string of new 52-week lows this year. AT&T shares
Wednesday closed down 13% from a day earlier in 4 p.m. trading on the New York Stock Exchange.
It is unclear how long Mr. Armstrong will stick around once the company is carved up.
So far, the board doesn't seem inclined to oust him, perhaps because it wasn't so long ago
that it put him in the job. And the board approved his strategies every step of the way.
While board members are "embarrassed," they are loath to remove Mr. Armstrong and
start a new CEO search on top of everything else, says a person close to the board.
The outside betting, at this point, is that Mr. Armstrong won't stay for long once the
restructuring is done. "Once AT&T is on a comfortable course, I suspect he'll leave
and go find something else to do," says Ron Walker, a retired managing partner of
Korn/Ferry International, the executive-search firm.
When asked about his role at the company, Mr. Armstrong said, "To accomplish this
is going to take us some time -- through 2002." Then he continued: "One of the things
I don't seem to be able to stop is growing older. I'm now 62, I will be 64 in 2002, and
I never believed I should work beyond 65, so if I can orchestrate delivering the value
of this in that time frame I'll feel pretty good about myself."
When asked if he would retire at 64 if the transition is complete, he said, "no," adding
that he doesn't plan to stop working until he is 65.
Nonetheless, some say they wouldn't be surprised to see Mr. Armstrong bail out long
before then, given AT&T's dismal performance. "A year from now, I suspect he'll be
doing something different," says Scott Cleland, an analyst with Precursor Group in
Washington, D.C. "He bet the farm on cable and lost a big chunk of it."
It also isn't clear whether Mr. Armstrong's handpicked lieutenants at AT&T's various
divisions will keep their jobs. Dan Somers, 51, AT&T's former chief financial officer,
is president of AT&T Broadband, which covers cable and Internet assets.
Richard Roscitt, 48, is head of Business Services, and Robert Aquilina, 45,
and Howard McNally, 47, are co-presidents of Consumer Services.
AT&T says it hasn't decided yet who will head up these divisions when they
become separate companies.
One of the few AT&T executives with a secure future would seem to be
AT&T board member John Zeglis, 53. Mr. Zeglis, AT&T's former longtime
general counsel, was one of a few board members willing to voice concerns
about Mr. Armstrong's big cable gamble a few years ago, and it now appears
that many of his concerns were well founded. He is also one of the few remaining
top executives to have seen AT&T through two previous breakups.
Mr. Zeglis is president of AT&T and CEO of AT&T Wireless. Under the current
plan, he would continue as chairman and CEO of AT&T Wireless after it is spun off.
The move stands to put Mr. Zeglis exactly where Mr. Armstrong had hoped to be
right now -- heading a fast-growing company with a bright future.
-- Joann Lublin and Deborah Solomon contributed to this article.
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