July 22, 2004
Facing plunging revenue and an unfriendly regulatory and legislative landscape, AT&T is abandoning the residential telephone market, though it says it will continue to serve existing customers.
The company's board of directors made the decision. It wants AT&T to focus all of its efforts on selling phone and data services to corporations and governments. That division brought in 73% of revenues in the last quarter.
AT&T's departure from the battlefield may be a major victory for Verizon, SBC and the other regional Bell operating companies, which own virtually all of the copper cable that delivers telephone service to homes. AT&T has had to rent access on the local companies' cable to service residential customers.
It's not all clear sailing for the regional companies, though. They face mounting competition from cell phones and from cable television companies that are increasingly offering local phone service over their circuits, as well as from Internet telephony.
