Monday, March 06, 2006

AT&T Acquires BellSouth

From the press release:

"AT&T Inc. (T.N: Quote, Profile, Research) said on Sunday it would buy BellSouth Corp. (BLS.N: Quote, Profile, Research) for $67 billion to expand its reach into the southeastern United States and acquire the rest of Cingular Wireless it does not already own.

AT&T and other major telephone companies also have been upgrading their networks to offer subscription-television services to thwart competition from cable TV operators, which are offering phone services. AT&T in January began offering video in Texas and plans to expand service to 21 cities in its home territory this year.

(Edward) Whitacre will be chairman of the combined companies, while BellSouth Chairman Duane Ackerman will head BellSouth operations for a transition period following the merger, the companies said."

From MocoNews:

"It shouldn’t change life much for the wireless side. But it should significantly increase AT&T’s role in IPTV, with the addition of more potential IPTV households. AT&T will use that to argue for the merger.

An opening salvo from the press release: “Consumers seeking a real alternative to cable monopolies should see faster and more economical deployment of next-generation IP television networks and similar services as a result of AT&T’s groundbreaking entry into IPTV and the unparalleled research and development work at AT&T Labs, coupled with BellSouth’s extensive deployment of fiber networks for DSL and other broadband services.”

From TechDirt:

Consumer groups are saying they'll oppose the deal, but it's unlikely that will matter. The request by one group that the combined company sell off Cingular (which is already jointly owned by the two companies) seems like a pointless suggestion that really doesn't impact the competitive issue at all.

If these groups really are concerned about competitive issues, they'd focus on network neutrality issues -- as the combined company (both parts of which have advocated ditching net neutrality) would be in a position of power when it came to offering broadband services to large parts of the country where little real competition exists.

From Om:

"Ben Silverman, a telecom analyst with independent investment newsletter says that, “The deal will raise fears that Verizon is left with no option but to acquire Qwest, causing further regulatory issues. Qwest will need to find a suitor, which could include Verizon or Sprint’s new local unit, Embarq. Valor Communications, which acquired Alltel’s landline business, could also be a suitor."

This basically makes it Verizon versus AT&T in the US telecom space. So its pretty much back to the future. I think this could prompt another round of mergers. Qwest and Sprint Local could make good partners. Of course, Verizon could make some moves of its own, and snap-up someone like Alltel."

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