A year ago,AT & T looked as if it might soon be sleeping with the fishes. Its long-time boss, Bob Allen,had been replaced in November 1997 by Michael Armstrong from Hughes Electronics, who was a relative novice in the telecoms business. The firm’s long-distance operation was being whittled away by newcomers such as WorldCom. Its international alliances were floundering,and it had wasted $4 billion trying to persuade its uppity offspring,the Baby Bells,to let it into their lucrative $100 billion local markets. People whispered that the only good bit of AT & T had been its equipment business.
Yet in the past six months Mr. Armstrong has silenced most of his critics. Some of his moves—for instance slimming AT & T' s workforce by another 18,000 people and piling money into Internet research-were only to the expected. But AT & T has also begun to throw its weight around.
It has terrified the Baby Bells, first by buying TeleCommunications Inc,America' s biggest cable-TV firm,for $48 billion and,this week,by forming a joint-venture with Time Warner,the second-biggest cable group,to deliver local telephone services. AT & T now has a potential line into 50 million American houses ( more than 40% 0f the total) ,and it is talking with other big cable operators about extending its reach.
Though AT & T's long-distance operation was being reduced ,its international alliances were doing extremely well. ( )