» AT&T/BellSouth Merger Would Unite Cingular Under One UmbrellaTelecommunications Industry News

Telecom News Editorials Reports Glossary

AT&T/BellSouth Merger Would Unite Cingular Under One Umbrella

7:00 am on March 6, 2006 | Category: Business, Corporate, Telecom Services, Wireless

With the massive merger deal between AT&T and BellSouth about to enter the regulatory approval process, it appears that uniting Cingular could be one of the prime motivators behind this agreement.

Cingular Wireless is a joint venture owned 60% by AT&T and 40% by BellSouth, and its two owners have successfully built it into Americaâ€™s largest wireless network. The question now is whether a host of regulatory agencies will okay the merger, and if they do, what effect it will have on Cingularâ€™s fortunes.

It appears that being operated by a single owner could be very positive for Cingular, and its continued competitive aspirations against other major players like Sprint Nextel and Verizon Wireless. And AT&T CEO, Edward Whitacre, seems to be banking on this fact.

Many analysts believe that, should the deal come to pass, regulators will force AT&T to sell some of BellSouthâ€™s assets in the local telephone market. But this wonâ€™t matter so much to Whitacre, whoâ€™s true motivation seems to be bringing together the ownership of Cingular. The local phone market, after all, is becoming secondary to the massive mobile phone industry, where most of the growth and revenue is in todayâ€™s telecom industry.

Whitacre claims that merging the two parent companies will lead to more efficient service delivery, and ultimately enhance Cingularâ€™s position in the market. “No partnership between two independent companies, no matter how well run, can match the speed, effectiveness, responsiveness, and efficiency of a solely owned company,” Whitacre commented.

Telecommunications Industry News