AT&T’s Restructuring Plans

N E W  Y O R K, Oct. 25 -- The massive AT&T corporation will split up into four smaller, publicly traded companies by 2002, the telecommunications giant confirmed today, a move that essentially dismantles three years of acquisitions by the largest U.S. long-distance telephone and cable television company.

The announcement is a bold restructuring move by the corporation, and the first since creating the “baby bells” in 1984. The four new companies will be AT&T Wireless, AT&T Broadband, AT&T Business and AT&T Consumer.

Two of the four new companies will represent the core of a new AT&T — the business unit that runs the company’s hugetelecommunications network and serves business customers, and aseparately traded subsidiary containing the shrinking consumerlong-distance business.

As separate stocks, investors will be able to track thegrowth or decline of each unit instead of trying to value theentire conglomerate with its disparate parts.

Meanwhile, long-distance customers will likely see little impact from AT&T’s restructuring, analysts said. The regional Baby Bell phone companies probably will not follow AT&T’s lead in restructuring since they lacked its range of services, the analysts added.

Wall Street Reacts Coolly

On the New York Stock Exchange, AT&T, which beat third-quarter earnings expectations today, finished down $3.63, or 13.3 percent, at $23.56, after stock downgrades from several Wall Street analysts, including Salomon Smith Barney’s Jack Grubman, one of Wall Street’s most influential analysts. He downgraded AT&T’s stock to “neutral” from “outperform,” saying, “We believe the businessis melting down.”

And Grubman is not the only analyst reacting less than enthusiastically to the restructuring plan.

“I think it’s the beginning of the end of an icon. It’s asad day in corporate history. It’s the surrender to WallStreet, which was foolishly looking for near-term results andstock gains on a five-