Bell Atlantic Announces Aggressive Cost Reductions Amid Increased Competition

Bell Atlantic Corporation plans to implement sweeping changes to achieve aggressive cost reductions as it faces increased competition in the local telephone market. The company's internal memorandum, dated August 3, outlines plans to adopt new accounting methods, depreciate existing equipment, and deploy new technology to reduce costs. This move comes as Bell Atlantic seeks to offer cable television services and competes with cable companies, cellular phone providers, and independent local-service companies.

Key Takeaways:

• Bell Atlantic will announce a "sweeping accounting change" and plans to achieve aggressive cost reductions through center consolidations, elimination of jobs, increased spans of control, and other measures.
• The company's internal memorandum, dated August 3, was addressed to four executives and outlines plans to hold a news conference to discuss the changes.
• Bell Atlantic and the six other regional Bell operating companies are trying to reduce costs in anticipation of increased competition in various aspects of their business.
• Cellular phone companies have entered the market for local phone calls, and independent local-service companies have built fiber optic networks to compete for large business customers.
• Cable television companies pose an increasing threat, with several top companies collectively planning to spend over $2 billion to enable their networks to offer phone services.
• A Senate committee has approved a bill to rewrite telecommunications policy, allowing local phone and cable companies to compete head-to-head in one another's markets.

Statistics:

• Bell Atlantic plans to invest in new technology to reduce costs.
• The company's internal memorandum was addressed to four executives: Ritchie Ireland, Larry Plumb, Robert Holtz, and Susan Younkins.
• The Senate committee bill would allow local phone and cable companies to compete head-to-head in one another's markets.
• Cable television companies plan to spend over $2 billion to enable their networks to offer phone services.

Sources:

• The Baltimore Sun

- No date provided