"AT&T was, at the time, the sole provider of telephone service throughout most of the United States. Furthermore, most telephonic equipment in the United States was produced by its subsidiary, Western Electric. This vertical integration led AT&T to have almost total control over communication technology in the country, which led to the antitrust case, United States v. AT&T. The plaintiff in the court complaint asked the court to order AT&T to divest ownership of Western Electric"
i.e. AT&T used its network monopoly to maintain control over hardware manufacture.
The breakup was a settlement of an anti-trust lawsuit over them leveraging their handset hardware monopoly to subsidize network costs so as to protect their telephone service monopoly, IIRC.
What about the breakup of Ma Bell?