Reorganizing AT&T: From Vertically Integrated to Customer-Centric Organization (B)

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The Break-Up

According to the break-up plan, the erstwhile AT&T would split into three separate publicly traded companies - a $49 bn-a-year communication services company that would continue to call itself AT&T (new AT&T); a $20 bn-a-year company, Lucent Technologies, which would offer communications systems and technology, and a $8 bn computer company, NCR, that would offer computer systems and services (Refer Exhibit II).

Allen commented on the spin off: "We found ourselves always concerned about coordination and were even reluctant to act sometimes for the fear we would hurt the other parts of AT&T. The three units won't need to be so considerate of one another anymore. Each company will have its own board and its own stock; AT&T shareholders received shares in all three." The new AT&T aimed at providing the world's best 'anytime, anywhere' communications and information services. The new AT&T consisted of AT&T's Communications Services Group, the AT&T Universal Card Services (UCS) Corporation,⁴ the newly established AT&T Solutions consulting and systems-integration organization, and AT&T Wireless Services, formerly McCaw Cellular Communications.

Lucent took over the business of designing, developing and manufacturing of telecommunications systems, software and products.

It was the global market leader in the sale of public telecommunications network systems, business communications systems and microelectronics components for communication applications.

It was also the largest supplier in the US of telecommunications products for consumers.

Lucent supported network operators and businesses with engineering, installation, maintenance and operating support services. Its R&D activities were conducted through Bell Labs. Lucent's wide range of communications products included corded, cordless and cellular telephones, telephone answering systems and related accessories...

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4] AT&T Universal Card Services is AT&T's consumer credit card unit. AT&T established UCS in March 1990 in Florida, US. UCS sold the AT&T Universal Card, a combination of general-purpose credit and long-distance calling card. There were 17.9 million AT&T Universal cardholders in the US by 1996.