AT&T To Split into Four Separate Companies

AT&T (www.att.com), announced plans to create four new companies, each operating under the "AT&T'' brand: AT&T Wireless, AT&T Broadband, AT&T Business and AT&T Consumer. Pending regulatory approval, the company plans to complete the split in 2002, at which time each unit will be a publicly held company. All AT&T stockholders will receive stock in all four of the new companies; however, the company states that dividends are expected to be substantially less.

When all four companies have been established, AT&T's principal unit will be AT&T Business, which provides enterprise communications and networking. The company will trade on the New York Stock Exchange under the "T'' symbol. AT&T Business will subsequently license the AT&T brand to the other three companies, and all four companies will continue to collaborate.

According to AT&T, the idea behind the mergers is to allow each new company to compete unhindered by the need to compete internally for capital. AT&T also hopes that the move will allow investors to individually evaluate the financial performance of each unit. AT&T's stock has been on a downward trend, which most analysts consider to be the result of an extremely competitive market for consumer long distance.

The AT&T Consumer company will explore growth opportunities in the DSL market, in addition to its offering of dial-up services.

AT&T also announced that, depending on market conditions, it plans to conduct an initial public offering for stock that will track the performance of its Broadband unit during the summer of 2001. AT&T Broadband is a provider of broadband services, including multi- channel video, pay-TV, high-speed Internet access, and communications. It will assume AT&T's ownership interest in Excite@Home in connection with its public offering.