Ma Bell is loaded and market watchers are mentally spending her money for her, but there’s no indication yet what she will do with the billions she gets from the sale of her credit card business.
AT&T Corp.’s $3.5 billion sale of Universal Card to Citicorp will not only bring in cash, but also wipe $5.6 billion in debt off the company’s balance sheet.
That should leave the long-distance giant ready to spend heavily on partnerships and acquisitions, particularly those that can help it break into the local phone market.
The ability to offer a full range of communications services, including local, long-distance, Internet and wireless, is crucial to the major companies, and AT&T has been woefully slow to develop a cohesive plan for entering the local market.
“The local strategy remains a very important hole to fill,” said UBS Securities Inc. analyst Linda Meltzer. “That would argue for an acquisition.”
It has been rumored lately that AT&T would buy Teleport Communications Group Inc., a local carrier that primarily serves business.
