AT&T see profits hit by competition, new technologies

US long distance phone company AT&T has reported a dive in net profits in the first quarter, as increasing competition put a downward pressure on prices.

In the first three months net profits came in at $304m (€256m), down 47% from the year ago period.

Sales dropped 11.1% to $7.99bn (€6.72bn) from the last three months of 2003, with competition from long-distance rivals such as MCI and new entrant Baby Bells dipping into AT&T's market share.

In addition, more customers are continuing to rely more extensively on newer technologies such as wireless phones or e-mail which has seen corporate-services at the telecom giant fall 9%.

The consumer business also dropped 16.2% from the year-ago period.