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.
Mr. Armstrong was expected to make more employees redundant soon after he became the new boss of AT & T. ( )