U.S.-Japan Investing

Summary transcript of program broadcast August 18, 1999

Subject: "AT&T Wireless Strategy"

Host, Dr. Dennis Laurie and guest Glenn Lurie, General Manager, Vice President, AT&T Wireless

Dennis Laurie: I am very happy to have with me today my guest, Glenn Lurie, VP, AT&T Wireless.

Let's focus first on the company as a whole. In December 1997, a new top man came in and his name is Michael Armstrong. What are some of the new directions and the impact Armstrong has had on the company?

Glenn Lurie: Mike Armstrong came in and really made an effort to take the old "Ma Bell", the old AT&T, to the new world.  We've gone from being very long-distance centric to a complete communications company offering everything in communications.

D. Laurie: When Armstrong joined AT&T, long-distance may have been 60 to 65% of total revenue?

G. Lurie: Actually, long-distance was probably higher than that. Right now we are moving with the goal in the next couple of years to completely reverse that into the wireless world, the Internet world, and so forth. Mike Armstrong has come in to acquire a couple of large cable companies, Internet protocol companies, etc., trying to be very aggressive in bringing all those packages together so that we can offer one product, one bundle, to consumers and business people alike.

D. Laurie: And those consumers are not just Americans. AT&T is reaching broadly and is certainly in the process of becoming, may be already is, a global company with some very important strategic alliances.

G. Lurie: BT (British Telecom) is probably the most critical and biggest one, and we've gone into a joint venture with BT. We've already made acquisitions in Japan, acquisitions in Canada, and to be a global, total communications company offering every aspect of communications to multi-national companies as well.

D. Laurie: Many of our viewers may be using LA Cellular, which has been a joint venture between AT&T and Bell South. Is LA Cellular totally owned now by AT&T?

G. Lurie: Actually, LA Cellular is still a joint venture, and we are moving forward. We did acquire the ability to put the AT&T name on the door and take over management of the operation in LA.

D. Laurie: What does that mean for our viewers, many of whom, I hope, are users of your service?

G. Lurie: What that basically means for our viewers is that they went from LA Cellular once being a regional, small based wireless organization to now being part of the largest wireless company in the country as well as the breath and expertise with the increase in new options as far as offers, rates and promotion. So it' s a great thing for Southern California.

D. Laurie: You talk about the rate. "Digital one rate" is what I see advertised frequently. What does that mean exactly?

G. Lurie: "Digital one rate" basically means that you can travel anywhere in the country with no long-distance or roaming charges. So if you are in California, and you can call for 11 cents a minute, you can make that same call in NY back to California for 11 cents a minute. What this has done or what Digital one rate did to the industry is revolutionizing it. We have offered our system and it has really been an absolute home run for AT&T Wireless.

D. Laurie: I want to probe the issue of how much growth areas are in your business. Here in LA, any number of people seem to be using cellular phones, but surprisingly the penetration rate is only about 25%, and you have lots of room still to grow. Wireless will absolutely grow.

G. Lurie: That's a great point. If you look at some other places in the world, Japan 50%, Finland 68% penetration, and we are right now around 25% in Southern California which is actually lower than the other areas of the country. So there is a lot of growth opportunity not just in voice but also other things like data over wireless.

D. Laurie: My sense is that you couldn't do it alone. You kind of need some strategic allies on the hardware side. I think Nokia, Ericsson, and Mitsubishi are coming up. How important are they?

G. Lurie: Absolutely, they are crucial. We offer what's called Trimode or DMN (Digital multi-network) phone, that is technology-wise the highest in the industry. Ericsson and Nokia have been great partners. Motorola will be here very shortly with their product as well as Mitsubishi. So they allow us, when we move closer together, to offer consumers and business users the highest technology and also affordable rates.

D. Laurie: With all due respect, as you say, technology clearly is important, but there is another dimension of that. Lacking that, you will fail and that's customer service. What are customers telling you?

G. Lurie: Customers are telling us that they are really enjoying, first of all, the AT&T brand coming to town. A lot of people really wanted to be with AT&T. Also, customers are telling us they love Digital one rate, they love our offers and we've also brought a new level of customer service to Southern California , that has been mentioned and noted.

D. Laurie: You've been the "post number one man" at AT&T Wireless to Southern California for three or four months. What do you see as your primary challenge?

G. Lurie: I think the primary challenge here is, number one, executing on the changes transitioning from LA Cellular, an outstanding organization, into a large company such as AT&T, and I think the key to that challenge is our people . It's a challenge I think we can accomplish. We've got a great staff of people, a great group here, and that's where we will be able to get through the challenge and make things happen.