TELECOM Digest OnLine - Sorted: Huge Phone Deal Seeks to Thwart Smaller Rivals

Huge Phone Deal Seeks to Thwart Smaller Rivals

Monty Solomon (
Mon, 6 Mar 2006 00:10:00 -0500


The New York Times
March 6, 2006

The AT&T Corporation, in announcing plans yesterday to buy BellSouth
Corporation for $67 billion after months of speculation, took the
offensive against low-cost rivals in the free-for-all for phone,
wireless and television customers.

With cable providers and technology companies entering the phone
business, the former Baby Bells starting to sell television
programming and more and more services available on mobile phones and
on the Internet, companies like AT&T are trying to bulk up and turn
themselves into one-stop shops for all communications needs.

"We literally have hundreds of competitors coming in every day; it's
nothing like the old days," said Edward E. Whitacre, Jr., the chairman
and chief executive of AT&T, the country's largest phone company. "If
we're going to have the strength to compete, we better get our
companies together."

The new company, with $120 billion in sales, about 317,000 workers and
71 million local phone customers in 22 states, would recreate a big
chunk of the former AT&T monopoly that was broken up a generation
ago. With the deal, only three Baby Bells would remain: AT&T, the
former SBC Communications that provided service in the Southwest and
elsewhere; and Qwest and Verizon, the $90 billion company which is
AT&T's chief rival. The latter two might now face renewed pressure to
build themselves up.

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