views updated May 08 2018


AT&T (American Telephone and Telegraph) is virtually synonymous with the telephone. It existed as a government-regulated monopoly until its court-ordered breakup in 1984. In return for its monopoly status, the company provided universal phone service at a reasonable cost. For most of the twentieth century, AT&T (or "Ma Bell") was the largest company in the world, with more than 1 million employees and $155 billion in assets. In the early 1980s, the dawn of the Information Age, political maneuvers and competition for control of the long-distance market combined to break up the Bell System.

After inventing the phone in 1876, Alexander Graham Bell founded Bell Company a year later (eventually renamed AT&T). Following years of patent battles and squeezing its competition, AT&T symbolized corporate greed, poor quality, and awful customer service. In the early twentieth century, however, under the leadership of Theodore Vail, AT&T became a model for the modern corporation. Vail centralized management, emphasized customer service, and formed Bell Telephone Laboratories in 1925. AT&T's management training program also served as a breeding ground for generations of business leaders.

The public quickly considered the telephone an indispensable part of life. AT&T also created the distinction between local and long-distance phone calls, a staple of modern telecommunications. The separation facilitated the rise of the regional Bell Companies, the "Baby Bells," and ultimately to the breakup of the parent company.

AT&T played a critical role in increasing American influence overseas. In addition to spreading phone service across the globe, Bell Labs invented the transistor in 1948, whose inventors—William Shockley, John Bardeen, and Walter Brattain—won the 1950 Nobel Prize for Physics. Bell Labs also developed cellular wireless technology (1947), computer modems (1957), lasers (1958), and communications satellites (1962). The electronic switching systems AT&T installed in 1965 paved the way for the Information Age and enable the Internet to exist today.

After divestiture in 1984, AT&T evolved into an integrated voice and data communications company. C. Michael Armstrong took over in 1997 and initiated a new sense of mission, direction, and urgency. Armstrong cut costs (including tens of thousands of layoffs) while increasing capital expenditures to secure AT&T's future. By mid-2000, AT&T had three rapidly evolving networks (broadband, wireless, and data) and four separate businesses (cable, wireless, business, and consumer).

In October 2000 AT&T announced a restructuring into four publicly held companies, AT&T Broadband, AT&T Wireless, AT&T Business, and AT&T Consumer, each trading as a common or tracking stock. On 9 July 2001, AT&T Wireless split off. In 2000 AT&T had revenues of nearly$66 billion, ran the world's largest communications network, and was the largest cable operator in the United States.


Smith, George David. The Anatomy of a Business Strategy: Bell, Western Electric, and the Origins of the American Telephone Industry. Baltimore: Johns Hopkins University Press, 1985.

Stone, Alan. Wrong Number: The Breakup of AT&T. New York: Basic Books, 1989.

Temin, Peter and Louis Galambos. The Fall of the Bell System: A Study in Prices and Politics. Cambridge: Cambridge University Press, 1987.


See alsoAT&T Divestiture ; Bell Telephone Laboratories ; Telegraph .


views updated May 17 2018

AT&T American Telephone and Telegraph Company. In 1991, AT&T merged with NCR to produce a company that is now number seven in terms of revenue in the list of the world's top IT suppliers (1993 figures). Its major revenues come from data communications, peripherals, maintenance, and services, but it is an important supplier of computers of all sizes, with a particular emphasis on UNIX-based machines, and of software. Following a merger with Teradata Corp., the company now has products in the area of massively parallel database machines.