BellSouth CEO says company plans more focus on domestic business

<p>The sale of its Latin American assets and Cingular's pending acquisition of AT&T Wireless will help BellSouth Corp. focus more attention on its domestic business as it faces growing competition at home, chief executive Duane Ackerman said Monday.</p><p>Ackerman told shareholders at the Atlanta-based company's annual meeting that BellSouth will do more with bundling communications services like wireless, broadband Internet and long-distance in the future to combat the loss of telephone access lines.</p><p>"Throughout the past 20 years, we've seen changes in our world, our industry and at BellSouth," Ackerman told several hundred shareholders gathered at a mall conference center. "BellSouth is changing the allocation of our resources in our portfolio."</p><p>The Latin America and Cingular deals are key to that change, he said. Cingular is a joint venture of BellSouth and SBC Communications Inc. of San Antonio.</p><p>Last month, BellSouth announced plans to sell its assets in 10 Latin American countries to a wireless unit of Spanish telecommunications giant Telefonica SA for $4.2 billion in cash and another $1.5 billion in debt.</p><p>In February, Cingular Wireless LLC announced plans to buy AT&T Wireless Services Inc. for $41 billion in cash. The deal is subject to shareholder and regulatory approval. Under the deal, BellSouth must pay 40 percent of the price.</p><p>Ackerman said the deal will help BellSouth enhance its bundle of services.</p><p>"Certainly, a broader product line ... is helping us compete in this very challenging marketplace," he said.</p><p>BellSouth, along with the rest of the telecom sector, has been hit hard by the loss of telephone access lines as competition has increased for local phone service. BellSouth said total growth in the industry is only expected to be about 1.8 percent annually through 2007, mostly because of the decrease in wireline voice revenue.</p><p>"As access line loss continues, we must reshape our business by driving down our cost structure," Ackerman said.</p><p>Last week, BellSouth reported a 30 percent jump in first-quarter profit on slightly lower revenue, but an executive said the company is concerned about the rate at which it is losing business and residential telephone access lines.</p><p>Chief financial officer Ron Dykes said at the time that the company's No. 1 priority is to do something about the number of customers who are dropping their lines from BellSouth's rolls. Its work force numbers may have to change to deal with the line losses, he said.</p><p>At Monday's meeting, those gathered considered several shareholder proposals. One sought to scale back the compensation of top executives while another wanted to cap the pay of the chief executive. A third proposal sought to get BellSouth to provide more details of the political contributions it makes.</p><p>Preliminary voting results showed that each shareholder proposal was rejected, as the board had recommended. A board-supported proposal to make directors stand for election every year instead of every three years passed. Three directors also were re-elected to the BellSouth board at the meeting, including former Delta Air Lines chairman and CEO Leo Mullin.</p><p>Some shareholders told Ackerman they were concerned with the industry's trend to outsource more of its work overseas.</p><p>Ackerman said that the competitive nature of the industry means BellSouth has to consider the most cost-effective way to do business. But, he said, BellSouth is working hard to keep jobs at home.</p><p>"Yes, we do business with partners that do have global resources," Ackerman said. "I think that's going to be required as we move into the future."</p><p>But, he added, "We have not reduced any represented jobs and replaced that with an offshore individual."</p><p>BellSouth, one of the regional phone companies that emerged from the Bell System breakup, serves 44 million customers and is the dominant local service provider in Georgia, Tennessee, Florida, Alabama, Kentucky, Mississippi, North Carolina, South Carolina and Louisiana.</p><p>___</p><p>On the Net:</p><p>HASH(0x2863438)</p>

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