US WEST Inc., the Colorado-based regional telephone company that also owns a cable television empire, said Monday it plans to split itself into independent telephone and cable companies.
US WEST said the businesses should do better on their own than they would as parts of a single company.The breakup is slated to occur "sometime after mid-1998" subject to approval by regulators and shareholders, it said.
The phone company would be called US WEST Inc. and would own telephone, data and wireless operations now serving 25 million customers in 14 Western and Midwestern states including Utah. It would also own a related Yellow Pages operation and electronic directory business known as US WEST Dex.
Solomon Trujillo, 45, president and chief executive of US WEST's phone business, would become chief executive of the phone company after the split-up.
Richard McCormick, chairman and chief executive of US WEST, would be chairman of the new US West.
The cable company - the nation's third-largest - would be called MediaOne Group Inc. and own a cable TV distribution system with more than 5 million customers in 19 states.
MediaOne would also own US WEST's 25 percent interest in the Time Warner Entertainment partnership that owns cable systems, the Warner Bros. film studio and the HBO pay-television service.
It would also own US WEST's international interests and interactive services.
Charles M. Lillis, 56, president and chief executive of the current cable business of US WEST, would be chief executive of MediaOne Group.
The company has been giving investors a choice between the two businesses since November 1995, when it set up its media group as a separate class of stock. The value of US WEST Communications shares are based on the performance of the company's local phone operation, while US WEST Media shares are linked to its cable and wireless units.
US WEST Communications shares were down 433/4 cents at $26.121/2 in morning trading on the New York Stock Exchange, while US Media shares were up 371/2 cents at $40.25
The two companies are expected to maintain their headquarters in the Denver area. US WEST is based in the suburb of Englewood.
US WEST originally felt there would be huge growth opportunities in having telephone and cable TV operations under one roof.
But McCormick said, "Recent developments in technology, markets and regulation will provide strategic competitive opportunities for both businesses that outweigh the benefits of remaining together."
Splitting the business will "make it easier for each of them to pursue exciting new opportunities for serving customers in the communications, data and entertainment sectors," he said.
The split will mean about 700 job cuts, mostly in the Denver area, to eliminate overlapping functions.