Cingular to Acquire AT&T Wireless

Posted By: Ryan Tuesday, February 17, 2004 8:52:27 AM

Cingular WIreless announced today they will acquire AT&T Wireless, creating the premier wireless carrier in the US. This would also be the largest GSM networks in the US. Combinded the company will have 46 million customers with service in 49 states and coverage in 97 of the top 100 markets.

Cingular Wireless is a joint venture between SBC Communications Inc. and BellSouth Corp. Under the terms of the agreement approved by the boards of directors of Cingular and AT&T Wireless, shareholders of AT&T Wireless will receive $15 cash per common share or approximately $41 billion. The acquisition, which is subject to the approvals of AT&T Wireless shareholders and federal regulatory authorities, and to other customary closing conditions, is expected to be completed as soon as late 2004. The combined 2003 annual revenues of the two companies would have exceeded $32 billion.

"This is great news for America's wireless users," said Stan Sigman, president and CEO of Cingular Wireless. "By combining the strengths of these two companies we expect to accelerate the availability of advanced wireless services for consumers. This combination is expected to create customer benefits and growth prospects neither company could have achieved on its own and will mean better coverage, improved reliability, enhanced call quality and a wide array of new and innovative services for consumers."

Customers of the new company will have access to the largest GSM network in the United States. GSM is the world's most widely used wireless technology with nearly one billion customers in more than 200 nations. Because both companies use the same technology, the network integration will bring customers almost immediate improvement in coverage and call quality. Cingular customers also will have the widest choice of handsets and devices in the industry.

Because of improved spectrum holdings, the new company should be able to accelerate its offering of advanced wireless data services and pave the way for high-speed third generation services in the future. This is important because consumers and businesses are increasingly relying on wireless internet and e-mail access. Cingular and AT&T Wireless have been leaders in rolling out high-speed wireless data offerings, including GPRS (General Packet Radio Services), EDGE (Enhanced Data rates for GSM Evolution) and trialing next generation UMTS (Universal Mobile Telecommunications System).

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Great News

chinchorrero @ 2/17/2004 10:02:17 AM #
Great News.
Cheers

"Life is Too Short"
Tungsten T3-Sony ericsson T610,HBH-60,SanDisk 256Mb Sd Card
RE: Great News
Altema @ 2/17/2004 11:46:13 AM #
Now if Cingular can only come up with a competitive data plan...

Oh Joy!

DWD @ 2/17/2004 10:06:38 AM #
This is great news...there is far too much competition in the wireless industry. We need to eliminate some players so we have fewer options, especially with this number portability thing...we need to get it down so that there is no other provider to port to. /sarcasm

[Admission: I don't own a cell phone. Hate them. I’m the only person in my office, only person in my profession that I know, without one. They are over hyped status symbols for most users, mildly convenient, incredibly annoying and overpriced. We all got along fine in the days without them. And if you drive while talking on one, you should be shot.]

RE: Oh Joy!
acaltabiano @ 2/17/2004 11:00:57 AM #
While I don't agree with your opinion of their lack of value (I personally have used one as my "primary" phone for some # of years), I do agree with the sarcasm regarding lack of competition.

This means their are now fewer forces in the water to bring prices down. Anyone remember when night and weekend minutes started at 7? I do. IT was standard. But away that went. How useful was it to have those minutes not kick in until 9? maybe if you live on the east coast and all your friends and family live in the west.

Because of recent competition, and number portability, we have now seen sprint drop its night and weekend minutes back to 7. Prices have dropped sharply. Now, our choices are Cingular, Verizon, and (ughh) Nextel (ugh). So, that leaves us with 2 (nextel doesn't count; if you want a walkie talkie, radioshack sells them for cheap, and doesn't have a monthly rate for them. You buy, you use! much cheaper) real choices for Nationwide coverage.

IT is real easy for just 2 companies to work out price fixing schemes. I am not saying that it will happen for sure, but let's just say that the desire to undercut competition will surely dwindle after this goes through.

I have had both services. AT&T was much better, from a call service standpoint, as well as Customer Service issues. I have had nothing but problems with Cingular since signing on, in that department.

RE: Oh Joy!
honus @ 2/17/2004 11:10:27 AM #
We all got along fine without computers and PDAs yet here you are....

RE: Oh Joy!
palmhiker @ 2/17/2004 12:38:43 PM #
DWD and I don't often see eye-to-eye, but on this I sort of agree that cell phones are over hyped. Unfortunately, they are necessary evils for the sake of convenience and safety.

A couple of years ago I ditched my AT&T monthly plans for my wife and I and switched to their prepaid plans. If you don't use a phone all that much, this is a much less expensive way to go; we average about $20 per month for 2 phones that are used sparingly.

Of course, all this probably goes out the window now with AT&T being purchased...

RE: Oh Joy!
DWD @ 2/17/2004 12:53:39 PM #
I will admit the economics are not too bad if you ditch your landline and go cell only. With all the government fees, taxes, and what ever other synonyms the government can come up with for give-us-your-money tacked on to our phone bills, it can make a lot of sense to go cell only.

As to getting along without computers and PDAs...there is not a day that goes by that I don't curse Bill Gates and imagine his neck being slowly squeezed between my clutching hands...go to Windows Update and click on View Installation History, read it all, and then tell me MS has any freaking clue about what they are doing...oh, a new "feature"...throw it into the OS without any idea of how it will interact with anything else or even what will happen if someone overflows a buffer...whatever that means...but, it sounds like something that they might should have checked in advance of putting it on millions and millions of machines.

I'm one of the more tech savvy in my office, but the more I learn, use, and rely on technology...the less I like it. There may be all kinds of downsides to collectively chucking all our computers, PDAs and cell phones out the window...but, a peaceful afternoon would not be a casualty. Bring back carbon paper and the aroma and pleasing blue ink of Ditto copies anytime.

RE: Oh Joy!
painted_dog @ 2/17/2004 1:05:28 PM #
Dudes, i'm bummed. I agree w/ DWD that the lack of competition is going to suck. Sure there are some Co.s out there but the choices are severed by systems Sprint & Verizon on CDMA. AT&T, Cingular & T-Mobile on GSM.

People will surely disagree w/ me but i liked AT&T at least in my area & places i traveled, i had coverage. & in general the service was good to me. (i've had them for 4+ yrs). I was hoping that Vodaphone would've stepped in then it would've kept the competition up & possibly opened up for some good international oportunities. Plus most of all i think it's going to suck that all the jobs that lost b/f of it. Sure it will create synergies, but i don't think the combined Co will be better than 2 separate Co.s [i hope i'm wrong] but i don't see them now using their new found capital to expand into areas that weren't covered.

I'm now thinking of who i may want to move too... i like the GSM system, but... orange isn't as nice a color a blue ;-)

-painted_dog

I've been happy with AT&T as well
Dolmangar @ 2/17/2004 1:52:06 PM #
I've got an AT&T TDMA phone (for personal), and an AT&T Blackberry (GSM/GPRS) phone (for work). The TDMA phone, although not as fancy, works, pretty much everywhere. Because of where I go, I need the TDMA phone since GSM doesn't generally work once you get off the major highways, or leave the cities.

The GSM network for AT&T has been spotty, although it has gotten much better lately.

Hopefully once they sort out the networks and phones, we'll end up with a solid GSM/GPRS network. I'd love to get a Treo as my next personal phone, but I've held back because it would turn into a door stop once I left the "well beaten path".



RE: Oh Joy!
I.M Anonymous @ 2/17/2004 5:19:47 PM #
Hey, don't forget T-Mobile/Voicestream/Omnipoint.

Economies of Scale and Consolidation is GOOD FOR CONSUMERS
Gekko @ 2/17/2004 6:23:11 PM #
Customers win with this merger. There will still be plenty of competition in the market to keep everyone honest. We needed some consolidation so that companies can cut their costs and thus cut their prices and compete more effectively against one another. Economies of Scale and Consolidation is GOOD FOR CONSUMERS in the wireless industry.


NO JOY AT ALL.... Sprint is next!
gfunkmagic @ 2/17/2004 6:39:08 PM #
[i]Customers win with this merger. There will still be plenty of competition in the market to keep everyone honest. We needed some consolidation so that companies can cut their costs and thus cut their prices and compete more effectively against one another. Economies of Scale and Consolidation is GOOD FOR CONSUMERS in the wireless industry.[/i]

I don't think this is necessarily true in the wireless industry. For example, where are all the price cuts after T mobile bought out Voicestream? All the broohaha about "economies of scale" across the Atlantic turned out to be complete FUD. In fact Tmo charges it's customers about the same price as ATT and others when it comes to international roaming charges and rates. This merger was mainly a strategic move by Cingular to make sure it's one of few big ones to remain standing at the end of the consolidation frenzy. The next victum unfortunately of this trend seems to be Sprint with Verizon as the likely suitor...However there are rumblings that Nextel may make a move as well...

I support http://Tapland.com/

--------------------
GNM

RE: Oh Joy!
rtgwbmsr @ 2/17/2004 8:28:54 PM #
I have a GoPhone, a payment system which will almost certainly be killed by Cingular, so they can charge me twice as much for prepaid...dang. I have no complaints about AT&T Wireless up to this point, and hopefully with whatever happens I won't have issues with the combined Cingular/ATT. I've had pretty much every major carrier except Nextel, and hated every one except AT&T. Cingular was good, with the exception of prices and the occasional dead zone. I hope it doesn't go back to that.
RE: Consolidation, synergy, etc...
madmaxmedia @ 2/18/2004 3:32:37 PM #
These takeover/buyout/mergers typically have little to do with customers, and a lot more to do with corporate matters.

They spin all this stuff about enabling better service for customers, but the simple fact of the matter was that Cingular figured it was cheaper to expand by buying AT&T Wireless than building out their existing company and infrastructure. Does this result in cheaper and better service for customers? It might, depending on competition and other factors. But the primary motive is profitability.

Not that that's a bad thing, it is what it is. With all the providers before, it was only a matter of time before a few basically lost and exited the market. At that point, they become good deals for the winners.

I imagine the greatest benefit to customers will be combined coverage area of Cingular and AT&T.

RE: Oh Joy!
mmmarkiep @ 2/18/2004 3:53:30 PM #
If you're a Cingular wireless customer, you win some here because of the expanded coverage you'll get in areas where AT&T has a presence and Cingular doesn't. Like the Twin Cities for instance.

I haven't looked to see where Cingular might have better coverage than AT&T. But this would be a win for customers, too.

The real opportunity is in increased revenues for the companies that will, hopefully, translate into more spending on network upgrades and expansions.

And if you don't believe the there's any competition in the wireless industry then turn on your TV and tell me what percentage of commercials you see are for wireless service these days.



Rollover Minutes

songdog @ 2/17/2004 12:15:03 PM #
Does this mean I get rollover minutes now? ;)

Had to Happen

RyanP @ 2/17/2004 12:31:44 PM #
i think consolidation had to happen in the US market. The US market does not have the population density of europe or japan and it has more space. that makes operating a cell phone network more expensive.

We will probably see more of this. Sprint is in a very weak cash/debt position. Nextel has issues with its spectrum. Specifically Nextel's users are causing interference which is hurting public safety users.

In the end we might end up with 3 or 4 carriers, which will be an oligopoly and not necessarily a competitive market. But who knows, the reduced operating expenses which will come from layoffs redudant workers might make the operations more cost effective. That could result in lower fees and by the way we in the US pay some of the highest fees in the world for cellular service.

RE: Had to Happen
rcartwright @ 2/18/2004 1:43:13 PM #
RyanP,

Regarding the relative cost of wireless, please realize that Europe is a very small, very dense area when compared to the continential US. Thus, you need a lot fewer towers in Europe, which drives the cost down.

Life is a great adventure or nothing.

How will it compare to Verizon?

4s @ 2/17/2004 2:22:26 PM #
I am curious how this will compare to Verizon. I am in rural Virginia and Verizon is the only game in town, as nothing (nothing) else seems to work around here.

Maybe now I can finally get a Bluetooth phone.

<><

RE: How will it compare to Verizon?
WireLess_OneDer @ 2/18/2004 12:53:31 AM #
Verizon rules! In all the major markets where both Cingular and ATT exist, Cingular will have to dump the ATT spectrum. So most of the west coast won't improve Cingular's spotty coverage. The wait is over. Motorola's V710 with Bluetooth is coming to a Verizon Wireless store near you. See: http://www.phonescoop.com/news/item.php?n=787

RE: How will it compare to Verizon?
4s @ 2/18/2004 11:20:07 AM #
Thanks for this post. A Verizon guy told me BT was coming and I did not believe him. I wonder how much this phone will cost.

<><
Cingular will have to dump AT&T spectrum?
Marshall Flinkman @ 2/18/2004 10:22:59 PM #
While I realize that it's possible that they may have to dump some spectrum in some areas, remember that they'll have to support all the phones on what's currently two different networks. It's not a case of "wave the magic wand and consolidate the two into the spectrum of one"... If you have hard facts of what they'll have to dump (i.e. comparison to a previous merger of two same-system companies), cite that. Without evidence to that effect, though, your argument looks weak. I can sit here and type a piece of very-logical-sounding fiction, yet it's no more true just for sounding logical. I can also type out something that sounds crazy but is in fact the truth, and it won't seem any more believable without facts to back it up.

Cancel them and move to unlimited

jbeedham @ 2/17/2004 10:35:43 PM #
Nearly every metro area has an unlimited service available. I got MetroPCS out here in Bay Area in California which runs $35/month for unlimited local calls. Need long distance? $40/month gets you unlimited local and long distance. I stopped counting minutes a long time ago and there is not contract.

-------------------------------------------------------
looking for a palm with a 320x480 screen with 802.11b integrated.
RE: Cancel them and move to unlimited
Altema @ 2/18/2004 11:19:24 AM #
Wow, that sounds like a good deal. Is GPRS data included?

RE: Cancel them and move to unlimited
sonicxracer @ 2/18/2004 10:12:07 PM #
Gimme a break. Metro PCS sucks. They don't even let you text message any other carrier!

No thanks :)

RE: Cancel them and move to unlimited
Altema @ 2/19/2004 10:23:16 AM #
Cancel that wow...

think about it

arielb @ 2/18/2004 1:47:39 PM #
who would have thought 20 years ago that another company would take over AT&T?

RE: think about it
madmaxmedia @ 2/18/2004 3:32:07 PM #
Well, a small spinoff of AT&T...

RE: think about it
mmmarkiep @ 2/18/2004 4:01:56 PM #
Comcast?

RE: think about it
derbi75 @ 2/19/2004 9:43:18 AM #
this is the wireless industry portion of their business not the whole bang. Being that I have been in this business for over ten years I have seen many changes, but the current wave of semi broadband on a cell phone or aircard is by far the thing to have. I'm a Sprint and Nextel dealer and believe me Nextel is out dated compared to what Sprint has to offer. Yah yah I have heard it all before about that Sprint's coverage sucks. So what all carries are not equal. They have their falts. Sprint is the leader in the industry for wireless data. I have converted so many users to their network that it makes my head spin. For the corporate customers they get a discount on their monthly service. None of the other carriers are doing this and the speeds speak for themselves.Sprint has really gotten off their ass when it comes to reception. They have increased their sites in masses. The Treo 600 is a record selling PDA for them and I sell 20 to 100 of them a month. If you have questions about what is happening with the industy just e-mail me I will be glad to discuss this with you.

I was given this from my boss and I don't have the sync software and will this work with win XP?
RE: think about it
mmmarkiep @ 2/19/2004 12:16:42 PM #
I'm just curious what good being the wireless data leader does if you can't get reception?

Time For Me To Switch?

MountainLogic @ 2/19/2004 2:19:37 PM #
I've been using ATT TDMA because of a deal I get at work (about 10%). I have two problems: I've moved to an area in the mountains that has poor coverage (esp. by ATT TDMA) and My TT just died due to a nasty ESD hit to the screen. I'm inclined to get a Treo 600 mostly because I don't want ot carry two devices. I'm not likely to be much of a wireless data user. I've asked my neighbors about coverage, but I guess the only way to be sure it to get a phone and give it a try. So which carrier should I look go with?

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