AT&T, Inc. and BellSouth Corp. plan to merge in a $67.1 billion deal that would create a colossal giant in the telecommunications industry. The deal pulls in Cingular Wireless, the nation’s biggest cell phone company, which is jointed owned by AT&T and BellSouth.
The three networks will combine into a fully integrated wireless and wireline Internet Protocol network offering a full range of services. It will operate under a single brand, AT&T. The move coincides with the industry’s convergence of the “three screens” that consumers rely on most today—televisions, computers and wireless devices.
“This is a great day for three great companies: AT&T, BellSouth, and the terrific jointly owned Cingular Wireless,” Edward E. Whitacre Jr., chairman and CEO at AT&T said during a webcast yesterday.
The deal means major cost cuttings and savings, including combining staff functions and reducing advertising and branding expenses, the companies said.
A single brand is more efficient in the marketplace, Whitacre said.
Cingular Wireless is expected to generate a third of the new company’s revenue with plans to offer services in the top 100 metropolitan areas by 2008.
Officials said the new company would ramp up its IMS offering, technology using the Internet to transport data such as text, voice and video. Additionally, it plans to launch next-generation IP television networks, a service using broadband Internet connections to bring streaming video to households.
“Today our two companies have more than 10 million DSL lines in service,” Whitacre said. “This positions us to deliver a host of next generation services created in a way to generate sustained value for our customers.”
Whitacre will work as chairman and CEO of the new company while Duane Ackerman will be chairman and CEO of BellSouth for a transition period following the merger.
The corporate headquarters for the combined company will remain in San Antonio. Cingular’s headquarters will remain in Atlanta, as will the combined company’s Southeast regional telephone company headquarters.
Last year, SBC acquired AT&T and kept the more recognized AT&T name. It unleashed a reworked crisp blue and white globe with a tag line “Your world. Delivered.” The re-branding campaign is still underway and includes changes to Web sites, 50,000 company vehicles, signage on 6,000 company buildings and on more than 30 million monthly customer bills.
Company officials said the AT&T and BellSouth merger could take 12 months to achieve shareholder, state and regulatory approval.
In 1984, AT&T and BellSouth were forced to split by the Justice Department.
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