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Analysis of Telephone Company Management Problems

Telephone Company Management Problems

Industry Leaders

Total Industry Earnings for 2004: 6.8 Billion Dollars

MCI
Chief Operating Officer: Michael D. Cappellas

2003 Sales (mil.) $27,315.0
1-Year Sales Growth (15.2%)
2003 Net Income (mil.) $22,211.0
2003 Employees 56,600
1-Year Employee Growth (9.7%)
Total Market Share 18.6%

AT&T
Chief Operating Officer: David W. Dorman
Vice President: Thomas W. Thorton

2004 Sales (mil.) $30,537.0
1-Year Sales Growth (11.6%)
2004 Net Income (mil.) ($6,469.0)
2004 Employees 47,600
1-Year Employee Growth (22.7%)
Total Market Share 19.5%

Sprint
Chief Operating Officer: Gary D. Forsee


2004 Sales (mil.) $27,428.0
1-Year Sales Growth 4.7%
2004 Net Income (mil.) ($1,012.0)
2004 Employees 59,900
1-Year Employee Growth (10.5%)
Total Market Share 13.5%

* Information from CNN.money.com

History

Alexander Graham Bell patented the telephone in 1876, and formed Bell Telephone which licensed local telephone exchanges in major US cities. AT&T was formed in 1885 to connect the local Bell companies. Their logo read "The Bell System: AT&T and Associated Companies." The network grew rapidly with the slogan "one system, one policy, and universal service." In 1913 AT&T agreed to become a regulated monopoly. Their monopoly would be allowed, but they had to connect competing local companies and let the Federal Communication Commission (FCC) approve their prices and policies Competition began creeping in 1956, when the courts overruled an FCC ban on Tom Carter's Hush-a- Phone, a device which snapped on to a telephone and made it possible for the user to speak in a whisper. That was perhaps the first step in the dissolution of telephone monopoly.

The Hush-a-Phone decision paved the way for 110 and 300 bit per second acoustically-coupled computer terminals, like the one shown here. Mr. Carter returned to court with his Carterphone, a device for patching radio calls into the telephone network. The 1968 Carterphone decision allowed the direct connection of devices to the AT&T network, creating an opportunity for many competitors. Where do you think we would be today, if all telephones, modems, FAX machines and answering machines were sold by one company? The FCC also decided to...

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