Chicago's little baby has grown upOnce a mere Baby Bell created from the 1984 breakup of AT&T, Chicago-based Ameritech is riding on the unpredictable wave of telecommunications deregulation. After branching out to provide local phone service, Ameritech has been expanding operations into new areas such as paging and e-mail, as well as overseas ventures in New Zealand and eastern Europe. Its SecurityLink Business is the No. 2 U.S. provider of security monitoring systems, and for telephone customers, Ameritech recently introduced Privacy Manager - a device that identifies and screens out calls from telemarketers. Analysts predict this service will make the company a bundle. As it looks forward, Ameritech aims to save $3 billion by 2002 through facility closings and layoffs.
Baby + Baby = A really BIG baby
In October 1999, fellow Baby Bell and West Coast phone giant SBC bought Ameritech for $62 billion, one of the largest telecom mergers to date. Ameritech kept its name in the five states it originially served, Illinois, Indiana, Michigan, Ohio, and Wisconsin, but the combined firm extends SBC's local service empire and lays the groundwork for a push into long-distance. San Antonio-based SBC notes that the merger launches it into the local phone business in 30 major metropolitan U.S. cities including New York, Denver, Phoenix and Atlanta. The telecommunications behemoth now boasts 59 million service lines in 13 states.
Using its new resources
Soon after its acquisition by SBC, Ameritech announced the formation of "Project Pronto," a $6 billion program aimed at providing DSL service to all the metropolitan areas in the five states under Ameritech's coverage. Beginning in early 2000 with 580,000 households in Wisconsin, "Project Pronto" promises to pit Ameritech and SBC against TimeWarner, which has recently increased its cable modem offerings in anticipation of its merger with AOL. SBC plans on having high-speed internet connections available to 77 million households by 2002.
Certain uncertainty
As is the case with any large merger or acquisition, employees of Ameritech - especially those in upper-level management - face the dillemma of moving on, or being forced out. Many chose to be forced out and accept the reportedly large severance package that came as part of the deal.
