AT&T to focus on business services

AT&T Corp., the largest US long-distance telephone company, said on Thursday it would no longer compete for residential customers due to changes in government regulations.

The announcement marks a historic change in direction from the once-dominant ‘‘Ma Bell,” which traces its history back to Alexander Graham Bell, and paves the way for corporate descendants, such as Verizon Communications Inc. and SBC Communications Inc., to win back millions of customers. AT&T said the decision stemmed from changes in federal policy that govern how the Baby Bells allow competitors to lease their phone lines into homes.

The company said it would focus on selling services to businesses, which now account for about 75 per cent of its revenue. ‘‘This decision means that AT&T will focus on lines of business where we are a clear leader, where we control our own destiny and where we have distinct competitive advantages,” chief executive David Dorman said in a statement.

But AT&T also reported an 80 per cent decline in second-quarter earnings. It said profit fell to $108 million, or 14 cents a share, from $536 million, or 68 cents a share, a year earlier. Revenue declined 13.2 per cent to $7.6 billion.