AT&T to split into four firms

Divide and rule: AT&T boss Michael Armstrong's empire may soon be split

AT&T, the number one US long distance telephone and cable TV group, wants to split into four companies.

Each of them would trade separately, but all of them would deal under an AT&T name.

AT&T's four units:

Wireless

Broadband and cable TV

Business communications and networking

Consumer communications

The plan aims to make it easier to see how much each of the group's individual businesses are worth to shareholders.

It would also allow each unit to respond more quickly to specific market conditions and to seek growth opportunities on their own.

AT&T has filed a preliminary proposal to seek both shareholder and regulatory approval for the plan.

Tracking stock

The company wants to create two tracking stocks, designed to reflect the performance of two separate parts of its business:

On the one hand, its business and consumer arm and on the other its broadband business.

Shareholders would get shares in all the four divisions, and their future shareholdings would represent their current stake in the group.

AT&T rose to close 46 cents, or 2%, higher in New York at 2,186 cents.

In the last year, the stock has under performed the Standard & Poor's index of the leading 500 US firms by 31%..

Debts

AT&T's plan to split the group into four comes soon after the UK telecoms giant BT announced its plans to split into two.

And like BT, AT&T has been working hard to slash debts by selling assets and new shares in the company, such as $3 billion in AT&T Wireless stock.

AT&T lost $366m during the first quarter as tough competition squeezed the price of telephone calls.