Cingular May Fall Off Top of Heap ; Cell-Phone Firm Will Have to Fight to Keep Its Place After at&T Wireless Deal
Posted on: Thursday, 28 October 2004, 03:00 CDT
Now that the purchase of AT&T Wireless is complete, Cingular Wireless' new status as the nation's biggest cell-phone provider may prove fleeting if the merged company does not move quickly.
The $41 billion deal, finalized yesterday with Federal Communications Commission clearance, pairs two companies whose customer-service rankings and operating performance are among the weakest in the industy.
One top concern has been the pace at which subscribers have been switching to rivals, especially at AT&T Wireless Services Inc., though Cingular's performance also has been unimpressive.
Those defections have been fueled in large part by a successful marketing campaign at rival Verizon Wireless.
The new Cingular hopes that the added network coverage and capacity from AT&T Wireless will help counter that perception almost from the start.
Subscribers at Cingular and AT&T Wireless Services Inc. total 47.6 million. The divestitures ordered by the Federal Communications Commission and Justice Department will subtract about 350,000 customers, leaving Cingular with about 47.25 million.
Verizon Wireless had nearly 42 million customers at the end of September.
The new Cingular, a joint venture between BellSouth Corp. and SBC Communications Inc., will have 68,000 employees, although an undetermined number of layoffs are planned starting next year. Under the merger deal, AT&T Wireless investors will receive $15 for each of their shares.
Under the FCC's order, Cingular and AT&T Wireless will not be allowed to merge in 16 markets and must divest themselves of assets in six additional markets. Virginia is not affected.
The two Democrats on the five-mentber FCC dissented in part to the merger, saying they are concerned it will harm competition.
Source: Richmond Times - Dispatch
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