A Brief History: Early International Activity

In the early 1900s, AT&T engaged in businesses that ranged well beyond the national telephone system. Through the Western Electric Company, its manufacturing subsidiary, AT&T affiliated and allied companies around the world manufactured equipment to meet the needs of the world's telephone companies. These firms also sold equipment imported from the United States. By 1914, International Western Electric Company locations included Antwerp, London, Berlin, Milan, Paris, Vienna, St. Petersburg, Budapest, Tokyo, Montreal, Buenos Aires, and Sydney.

In 1925, Walter Gifford, newly elevated to the presidency of AT&T, decided that AT&T and the Bell System should concentrate on its stated goal of universal telephone service in the United States. He therefore sold the International Western Electric Company to the newly formed International Telephone and Telegraph Company (ITT) for $33 million in 1925, retaining only AT&T's interests in Canada. Although AT&T retreated from international manufacture, it retained an international presence through its drive to provide global telephone service to customers in the U.S.

In 1927, AT&T inaugurated commercial transatlantic telephone service to London using two-way radio. Initially, these calls cost seventy-five dollars (U.S.) each (for three minutes.) Service spread to other countries, both via London and through direct radio links. Radio-telephone service to Hawaii began in 1931, and to Tokyo in 1934. Telephone service via available radio technology was far from ideal: it was subject to fading and interference, and had strictly limited capacity. In 1956, service to Europe moved to the first transatlantic submarine telephone cable, TAT-1. Transpacific cable service began in 1964.