Slash and grow: AT&T’s turnaround plan

AT&T, the US telecommunications carrier, has announced details of a strategic plan to cut net debt from USD16.1 billion to USD10 billion by the end of the year, while simultaneously expanding its local phone service coverage. The company’s announcement is the result of its recent struggles to contend with the effects of increasing competition and its failure to stem declining turnovers. AT&T’s strategic plan envisages a convergence of mobile, local, and long-distance services into a bundled service package. The carrier’s goal is to expand the coverage of its local service from eleven US markets to 22 by the end of the year. The reinvestment into the company to attain its goals is projected to be four times greater than that of its two largest competitors. The company’s achievement of trimming net debt by USD3.75 billion in Q1 2003 coupled with recent gains in its share price could be an early indicator of a successful turnaround strategy.