Poor Ma Bell. Now that she has shed her consumer business -- the business she invented -- some are saying her days are numbered (see AT&T Reports Q2, Scales Back Services).

“I don’t see any big growth areas for AT&T,” says Eli Noam, director of the Columbia Institute for Tele-Information. “It’s really a sad situation. I think its future is to be acquired, but if it hasn’t so far it's because of the price.”

The viability of AT&T Corp. (NYSE: T) as a standalone company has come into question. The company now says it is considering a writedown of the value of its network assets, a move that will make it more of an acquisition target. Also, its long-term financial picture took a turn for the worse as its debt was recently downgraded to “junk” status by Standard & Poor’s.

But does this old lady have anything going for her?

With three million global business customers in 149 countries, AT&T is the number one provider of business voice and data services, and it has a strong brand name. But along with those positives, AT&T has made more missteps than a tightrope walker with three left feet. It tried to penetrate the personal computer business. It tried to dominate the cable industry. It tried to become everybody's local phone company. And, finally, it took a swing at the wireless sector, only to succumb to Cingular Wireless.

But now that it has shed all those parts, AT&T is a smaller, leaner, more focused company, says Argus Research analyst Kevin Calabrese, who has a Hold rating on the company. “They’ve taken a lot of drastic steps and gone back to their core operation,” he says. Calabrese and others believe that AT&T can survive for the long haul without being swallowed.

Analysts say that for AT&T to stand alone and survive, it must do five things:

Experts say there are other, less-flattering reasons AT&T may want to stand alone. For one thing, it may not be the most desirable of buys at any price. “It’s not clear who would need the assets of long distance [carrier],” says Mark Jamison, director of telecommunications studies at the University of Florida. “The Baby Bells are already starting to develop their own networks and customers might not need it.”

And some feel poor Ma Bell has shed so much, no one's sure what AT&T the brand means anymore. “They got rid of wireless [and] before that Lucent, then NCR,” Eli Noam says. “It’s like peeling the layers of an onion. Maybe that’s the wrong analogy. You reach the pit, not the essence.”

— Marcy Burstiner, special to Light Reading