BellSouth

Each day, BellSouth connects 34 million customers to the worlds of data, the Internet, video, voice and entertainment, providing worlds of unlimited potential for investors. BellSouth Corporation is one of the world's largest communications companies, serving close to 34 million customers in the United States and in 18 other countries, with a particularly large market in Latin America. The company provides local telecommunications as well as wireless local and long distance service, long distance access, cable and digital television, Internet access, and other electronic commerce. In addition, BellSouth is a leading advertising and publishing company, putting out many advertising directories, including The Real Yellow Pages ONLINE. The company began as a so-called Baby Bell company with a market in the southeastern United States. Though this region remains a core market for the company, it is in no way a strictly regional entity. Approximately 40 percent of BellSouth's revenues come from providing traditional local telephone service in its region, with the rest coming from other services both in and outside the South. In 1987 BellSouth began offering an information gateway service that let customers access databases using a personal computer. By dialing a number in the Atlanta area, customers could get stock quotes and make airline reservations. Customers with cellular phones could also dial a number to get local traffic reports. BellSouth continued foreign expansion by buying an Australian telephone answering machine company. BellSouth and the other regional holding companies were dealt a major legal setback in 1987 when Justice Harold Greene, who was overseeing the breakup of AT&T, ruled that the companies still could not enter the long-distance telephone business in the United States, offer advanced information services, or manufacture phone equipment. Greene ruled that removing the restrictions would impede competition and violate antitrust laws. BellSouth and the other regionals appealed. Greene's ruling, however, prevented the regionals from transmitting only information they collected themselves. The regionals could not own or develop their own databases, but they were allowed to transmit third parties' databases. BellSouth was, therefore, able to sign an agreement with Telenet Corporation to link some of its local and national communications networks. Still, BellSouth hoped to increase the use of online information services and increase the revenue from its local network. In 1987 BellSouth's government systems division won a $25 million contract from the U.S. Army to modernize telecommunications systems at six installations in Alaska, Arizona, Colorado, and Texas. In 1988 BellSouth spent $3.2 billion on advanced digital switching and transmissions systems to improve communications and lay the groundwork for new telecommunications services. CEO Clendenin wanted to use BellSouth's advanced network to transmit a great variety of voice, data, and television programs into millions of homes for far less money than the cost of using conventional copper lines. BellSouth was the first RHC to bring fiber-optic cables directly to homes, hoping to use them to transmit security and energy-management information and cable television, in addition to voices. BellSouth won a $55 million telephone-switch contract from the U.S. government in late 1987. The following year, however, amid accusations that it had improperly obtained information from a government employee in the process of bidding on the contract, BellSouth withdrew its bid, and the government awarded the contract to AT&T. The year 1989 began with a disappointment when Bell Atlantic beat out BellSouth in the competition for a $220 million, ten-year contract to build an advanced phone system to link government agencies in the Washington, D.C., area. Nevertheless, business was flourishing for BellSouth and for telecommunications in general. Telecommunications was a bigge