The Scoop...

One of the Baby Bells

BellSouth is the third largest of the original Baby Bells (after Verizon and SBC). The Atlanta-based company offers voice, data and Internet services to almost 46 millioncustomers in the U.S. and 15 foreign countries, mostly in Latin America and Europe. It also owns 40 percent of Cingular Wireless, the second largest wireless company in the U.S.

A history lesson

Atlanta-based BellSouth can trace its roots back to 1878, when Theodore Vail, general manager of National Bell, hired James Merrill Ormes to market Alexander Graham Bell's revolutionary telephone throughout the South. In those early days, competition was surprisingly fierce, especially from rival Western Union. Ormes, however, managed to bring Western Union to the negotiating table, and Southern Bell Telephone and Telegraph was born. Through a steady program of buy-outs and mergers, the company managed to extend its market dominance throughout the South. In 1968, it divided into two separate units: Southern Bell and South Central Bell. Fourteen years later, when antitrust regulators split AT&T into seven regional holding companies or "Baby Bells," the two companies reunited. The new entity, known as BellSouth, was at that point the largest Baby Bell.

The formative years

Throughout the 1980s and 1990s BellSouth expanded its services, mostly by acquiring cellular and paging companies, as it did in 1991 when it bought 18 cellular systems from McCaw Cellular. In 1995, the company invested heavily in PCS when it bid $47.5 billion in an FCC auction of the broadband radio spectrum. Two years later, with Duane Ackerman as CEO, the company began to expand abroad, especially in Latin America.

A Cingular sensation

In October 2000, BellSouth combined its wireless phone operations with those of SBC Communications, to create Cingular Wireless, the second-largest wireless company in the U.S. BellSouth owns 40 percent of the venture, while SBC owns the remaining 60 percent. At the end of 2001, Cingular Wireless had 21.6 million customers in 42 of the top 50 markets in the U.S. In mid-2002 Cingular will move into the New York City market thanks to a joint venture with VoiceStream that lets it compete in the coveted market without having to build its own network.

Broadband and data

Broadband services are a major growth area for BellSouth. The company is one of the fastest growing Internet service providers in the Southeast with over 1.2 million customers, half of which use DSL high-speed access. Revenues from data services in 2001 rose to $4.5 billion, or about 20 percent of the company's total revenue. BellSouth is forecasting data revenue to grow 22-25 percent in 2002.