The president of AT&T left the company yesterday, in what analysts say is another symptom of the troubles faced by the struggling telephone giant.
Betsy Bernard quit AT&T after the company scrapped plans to spin off its consumer long-distance business with her as CEO, analysts said. She was replaced by William Hannigan, a veteran phone executive and current CEO of Sabre Holdings Corp.
Beset by increased competition, falling rates and new technologies, AT&T’s sales have fallen for 15 straight quarters. AT&T CEO David Dorman has tried to reshape the company with layoffs and new management.
Bernard, who was recruited in 2001 from Qwest Communications, tried to shore up the company’s long-distance revenues with a new flat-rate calling plan, but AT&T’s consumer sales still fell 16 percent in the third quarter to $2.4 billion. Total revenue fell 8.1 percent last quarter to $8.65 billion.
“We have no reason to believe that the departure is performance related, other than the fact that managing a business with declining revenues and undergoing consequent downsizing is presumably not as enjoyable as some other alternatives,” said Merrill Lynch analyst Adam Quinton in a research update.
Bernard may have left for ambition’s sake. But AT&T’s decision to abandon an initial public offering for consumer long distance shows how soft that market is. Competition from cable providers and boutique long-distance companies have sliced rates, and Internet technology threatens to cut them even further.
AT&T’s consumer business, which once boasted 60 million customers, now has closer to 35 million, with less than half the revenue.
After falling in early trading, AT&T’s stock rebounded to close nearly unchanged at $20.27 a share.