Here Comes the Real Fun for Telecom

This will be the year that long-distance and local calling get reunited in one business. And that's sure to transform the industry

At first glance, America's largest telecommunications companies seem to be staring at the same old quandary. Only the largest Baby Bell, Verizon (VZ ), managed to deliver a net profit in 2002's fourth quarter -- a slim 1.2% margin -- thanks in part to its wireless subsidiary. No. 2 SBC Communications (SBC ) and No. 3 BellSouth (BLS ) reported that rising competition would continue to chip away at revenues and profits. AT&T's (T ) revenues slid last year, and execs at the largest U.S. long-distance carrier aren't even predicting what might happen next. Barring a miracle, 2003 for the telecom industry seems to be shaping up much like 2002 -- which wasn't pretty.

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