AT&T Wireless and Cingular Merger

Who in this class owns a cell phone?
Who has either AT&T Wireless or Cingular as their service provider?
There should be over 40% of the class with AT&T or Cingular because of the merger.
Where did AT&T wireless go wrong?

II. Actions that caused the merger--- Where AT&T wireless went wrong
A. Innovation with phones
1. Other service providers simply had cooler phones
2. AT&T because of the many different networks it was trying to operate limited the phones a customer could select because of their network.
B. Government announcing that cellular numbers could migrate in late 2003
1. Intended to increase competition between cell phone providers
2. Caused AT&T to put itself up for sale
C. Poor customer care
D. Software developed for AT&T at the end of 2003
1. Lost 100 million for the company
2. Didn’t allow people to migrate to AT&T wireless
E. Couldn’t handle the competition
1. 1999 and 2000 Cingular and Verizon became industry leaders because of strategic accusations
2. AT&T becomes number three in the industry
http://seattlepi.nwsource.com/business/191742_attw21.html ---check out the graph
III. Effects of the merger
A. Cingular and AT&T largest buyout ever
1. 41 billion dollars
2. October 26, 2004
B. Bad for competition
1. Only Verizon and Cingular are left as industry leaders
2. 6 million more Cingular customers
C. FCC is sending message to Verizon that it can bulk up like Cingular did
1. 70 out of 189 megahertz of available spectrum in market is owned by Cingular
2. It seems only two companies will be able to compete

IV. Future effects of the merger
A. Increase in prices and decrease in service
1. Less motivation for the two power companies to work harder
2. two companies can work together to raise prices
B. Decrease in competion between wireline phones and cell phones
1. SBC Communications and BellSouth own Cingular
a. These two companies own a majority of California, the South, and the
Midwest’s wireline services
C. Huge cuts in workers


~ This merger has the potential to have lasting effects on the rest of our lives
~ The cell phone market in the near future could become a two company battle
~ The high prices we pay for cell phones could trouble us the rest of our lives