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Bell Atlantic restructures
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September 29, 1998: 1:26 p.m. ET
Baby Bell creates six business groups to ready itself for competition, GTE merger
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NEW YORK (CNNfn) - In preparation for a deregulated market and a pending merger with GTE, Bell Atlantic said Tuesday it is restructuring its business units and creating a new office of the chairman.
The New York-based local telecommunications company said it will create six business groups to better serve specific market segments. They are: the Enterprise Business Group, General Business Group, Consumer Group, Network Services Group, Directory Group and Wireless Group.
The presidents of each group will report to Lawrence T. Babbio Jr., president and chief executive of Network and chairman of Global Wireless, and James G. Cullen, head of Bell Atlantic's Telecom division.
Babbio and Cullen will join Seidenberg in a new Office of the Chairman.
"New opportunities and new customer requirements have to be met in new ways," said Bell Atlantic Vice Chairman, President and Chief Executive Ivan Seidenberg. "With the advent of product bundling and Internet protocol-based networks, we need to structure our business units to foster a more entrepreneurial mindset and stimulate innovation so we can anticipate and meet customer needs. In our new high-growth markets, responsiveness will be the competitive difference."
Under the restructuring plan, members of the Office of the Chairman will be charged with oversight of their respective business units, the transition to the new business group structure and the GTE merger process.
They also will be responsible for identifying new growth opportunities, including additional mergers and acquisitions.
The restructuring is expected to be complete by Dec. 1.
In July, Bell Atlantic agreed to buy GTE Corp. (GTE) in an all-stock deal valued at $52.8 billion. The merger combines Bell Atlantic's local and wireless phone service with GTE's local, long-distance, wireless and Internet businesses.
The merger is designed to reap the benefits of the Telecommunications Act of 1996, which opened up the local phone-service market to competition. So far, however, introducing competition has been easier said than done.
Long-distance carriers argue the regional Bell operating companies are not opening up their telecommunications lines fast enough to would-be competitors. And they say the Baby Bells are inflating access fees for use of their network.
The Baby Bells are not allowed to begin selling long-distance service until they prove in court they have complied with the Act. In the meantime, local companies are teaming up with competitors in preparation for market entry once regulators give the go-ahead.
AT&T (T) Chairman C. Michael Armstrong said Tuesday the mergers between Ameritech (AIT) and SBC Corp. and Bell Atlantic and GTE "are not in the consumer's interest and should be denied."
Armstrong also called for sharp reductions in local network access charges. Reducing these fees to their cost would produce a "multibillion dollar tax reduction" for consumers, he said.
His statement is the first time Armstrong has outright asked federal regulators to reject the mergers.
Bell Atlantic (BEL) shares were up 1-3/8 Tuesday afternoon at 49 on the New York Stock Exchange. 
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Bell Atlantic
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