Cingular and At&t

Running Head: CINGULAR AND AT&t

AT&T

as it relates to the Global Communications Scenario

University of Phoenix

Abstract

In 2004, Cingular Wireless bought AT&T Wireless Services. This paper will focus on what gain or loss can come from such a merger. The paper will answer the questions "Does a merger or partnership necessarily mean bigger profits?" and "What problems can arise from a merger or partnership?"

Cingular and AT&T Merger Synopsis

Cingular Wireless bought and merged with AT&T Wireless Services in 2004 creating the largest wireless provider in the United States. This is part of an ongoing effort to consolidate the deregulated communications market, particularly bringing back the Baby Bells into the AT&T fold. But is this good for consumers or the companies? Some evidence suggests that these mergers are not.

With Cingular's merger with AT&T, the then current largest wireless provider, Verizon Wireless, was surpassed by several million subscribers (Hill, 2006). This new larger company however, is having some growing pains it may not soon grow out of. Combining networks and keeping good customer service has proved to be a problem. An example of this is shown in North Carolina where SunCom inherited about 211,000 AT&T customers during the AT&T and Cingular merger (Murawski, 2005). Customers are being told their expensive equipment will not work in the new network, their family share plans will no longer work with anyone outside the SunCom system, and that if he or she want to stay with AT&T they will have to pay the $175 termination fee (Murawski).

The merger has also not generated the expected new customer signups. By having the largest subscriber base, AT&T expected that family share type of plans, which have more contacts available for the plans, would be more attractive in their network (Hill).