Divestiture could be more of a blessing than a curse.Tran 3When looking at just the surface layer of the outcome of AT&Ts divestiture, it may looking alarmingly like the company suffered a loss. Further investigation shows that the company actually experienced gains due to divestiture. At the time of the divestiture in 1984, AT&T had 96% of the business; by 1994 that share had fallen to 61%. Prices appeared to be falling, but the overall value of long distance service rose dramatically. Long-distance service rose from $34 billion in 1984 to $64 billion in 1994. As demonstrated by the figures provided, business took off after divestiture for AT&T. While profits for long-distance services were rising profits for local service was also rising. The seven Regional Bell Operating Companies (RBOCs) that formed from the BOCs at divestiture still controlled 98% of all local service Therefore, divestiture seemed to be a win-win situation for everyone. Not only did profits increase, but jobs also increased. As a result of divestiture, the demand for installers, manager, linespersons, and operators rose. In other words, not only did the company benefit from divestiture, but the employees also benefited. If employees benefit from divestiture, then would the converse of this statement also be true? Would no regulation actually hurt the firm? Not necessarily, though divestiture does seem to display increased gaining. Extensive studies have predicted that regulation of a firm will increase profit by almost $300 billion in real GDP and create almost 3.6 million new jobs by the year 2005. The future looks much better for AT&T since deregulation in 1984. The company could look at its deregulation as an opportunity to expand. After deregulation, AT&T was faced with the dilemma of transforming itself. It was during this time of transition that the company developed a partnership with Y&R Inc. This partnership has proven to be succes...
