Recently, we announced an aggressive plan to achieve a competitive cost position through further targeted expense reductions, improved cycle time and workforce downsizings - with 25 percent fewer corporate officers, accompanied by a salary freeze for senior executives. We intend to reduce selling, general and administrative expenses from 29 percent of revenues in 1997 to 22 percent of revenues by year-end 1999. Execution means everything from delivering the most reliable network in the world to superior customer care to effective communication with shareowners and employees. It means meeting our commitments and surpassing customer expectations. Executing to meet all of our customers' communications needs is what we are.
Balance means making the right trade-offs between investment and earnings.
In addition, with a competitive cost structure, we will be able to add value, through improving earnings per share and cash flow. They are challenging the constitutionality of the Telecom Act and its authority to establish national communications policy. The intent of Congress and the Act will be either confirmed or redefined by this litigation, but it will delay our entry into local services, as well as the Bell Companies' entry into long distance. To implement large-scale local telephone competition in America, that wire must be shared and sold on an economically viable basis to justify local investment. And it worked.