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In the field of telecommunications alone, AT&T already has under development such 21st century-sounding devices as phones that use miniature display screens to identify the source of a call before the receiver is answered; phones that can edit out and block pre-selected callers from reaching a person's number at all; phones that can even double as personal desktop computers. Also in the works is a broad range of video phones for offices and, most exotic of all, portable and cordless little devices that can provide instant direct-dial access to telephones around the world. Beyond telecommunications, divestiture is expected to take AT&T into such red-hot markets as office automation, electronic information and bankat-home services, and even the mainframe computer business, a field now dominated by IBM.
Shorn of its local operating subsidiaries, AT&T's gross revenues are expected to drop from a current level of $57 billion to $30 billion. But a 270-page study of the impact of the settlement on the company by International Resource Development Inc., a Connecticut-based consulting firm, projects that inflation-adjusted revenues will double in the coming eight years, with nearly all of the gain coming from new businesses.
For AT&T's rivals, the shake-up will create both opportunities and challenges aplenty. Virtually overnight, a giant new competitor has loomed up to cast its shadow over their markets. To stay in business, even such multi-billion-dollar corporations as IBM, ITT, RCA and General Telephone & Electronics will have to run harder and innovate faster than they ever have before. Meanwhile, just behind the American companies are Japanese firms like Nippon Electric that are becoming more important every year in the rapidly growing field of high-technology communications.
AT&T's competitors, though, are ready to do battle. Earlier this month IBM completed a major restructuring of its marketing operation in order to be in a better position to maintain its computer market dominance. RCA, which already has four communications satellites above the earth, is likewise undaunted. Even tiny MCI, the long-distance phone company that has already launched a serious fight for some of AT&T's long-distance markets, is confident that it can stand up to the giant. Said MCI President V. Orville Wright: "We can beat them from the standpoint of cost. I see the possibility now that we could get a third of the longdistance market."
The challenge for AT&T will be to capitalize on its extraordinary opportunity. Though it is the world's largest corporation, with more than a million employees and $137 billion in assets, financial strength alone does not guarantee company success. One immediate problem for which no amount of corporate bulk can compensate is the firm's lack of marketing expertise.