In Risky Move, a New AT&T Bets on Internet Technology
[SOURCE: Wall Street Journal, AUTHOR: Peter Grant peter.grant@wsj.com and Almar Latour almar.latour@wsj.com]
Don't call it SBC anymore; the new AT&T is placing a risky bet that its future will depend on delivering content to television, wireless phones and computers on a network using Internet technology. In doing so, the merged company hopes to play a central role in the seismic changes under way in the media and telecom businesses. Only 23% of AT&T's revenue will come from the residential landline phone business that for decades was the main engine driving the venerable company founded in 1885. That business, along with most other wired voice services, has been suffering anemic or negative growth for years because of new technology and new competitors. A key to AT&T's new growth strategy is to deliver video, data, wireless calls and phone traffic over a single network to consumers and large corporate customers. AT&T executives say the technology will let it offer a new form of television with 1,000 or more channels available to consumers within the next 18 months. The company also plans to beam TV content to cellphones; offer targeted advertising on TV, much like Google offers on the Internet; and eventually provide thousands of programs and movies on demand. Yahoo, which has been working on ventures with SBC since 2001, will work closely with AT&T in this effort and will help develop search technology and advertising.
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* Cingular will be sold under name of AT&T
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