Business as Usual

By Wayne Rash  |  Posted 2007-01-05 Print this article Print

However, that doesnt mean that customers should expect instant changes, especially in their wireless services. "Its business as usual at Cingular," said Cingular spokesperson Mark Siegel. "We still are the nations largest wireless company, but now we have a single owner. It makes decision making faster and easier," he said. "Because of what AT&T is doing, well be able to offer converged services, which will be an enormous advantage to our customers."
Eventually, change will come. "But over time the Cingular name and brand will be folded into and subsumed by the AT&T brand," Siegel said, "Its going to take place gradually."
"Bundled packages will happen over time," Siegel explained. "Youll see the distinction between wireless and wire line disappear over time." "Clearly consolidation is going on in the marketplace," said Jack Gold, founder and principal analyst for J. Gold Associates. Gold said that while the merger does mean that AT&T will be able to provide a wider suite of services, hes not sure the change will do a lot to help enterprise users. "These guys are so focused in providing all of these services to consumers that its highly likely that the enterprise customer is not going to truly benefit from these guys coming together," Gold said. He added that the merger will add huge expenses and corporate debt, much of it devoted to "getting the companies together to deliver video to teenagers." In addition, Gold said that the merger reduces competition in some areas. "In telecom its going to be a two-horse race now for the most part," Gold said. "The fewer options you have, generally prices go up." Gold also said that with reduced competition, he would expect the level of service to go down. But the news isnt all negative. According to Gold, a lot depends on who you are. "For smaller players, I think they will actually have more options. Most of those folks arent interested in getting dedicated T1 lines," he said, noting that the larger company will mean richer offerings in many areas. Regan said that increasing the offerings to small businesses is an important part of AT&Ts strategy. "Small business is fueling this economy, and we want to help that business," Regan said. "Were to looking to expand on that to bring more value to small business customers," he said. Passmore, however, said he thinks the effects of the merger will run deeper than simply offering better bundling deals to business. "It provides an opportunity for greater fixed mobile convergence," he said, noting that the merger could hasten the arrival of the call control necessary for combined cellular and WiFi handsets, for example. Passmore also thinks that AT&T will have to make its bundled offerings attractive to business, or nobody will buy them. But he said that as long as there is competition, AT&T will have to offer a lot. "Verizon is the target for this. Were headed to a two-carrier market for all of this with AT&T and Verizon," he said. Passmore said that he thinks Sprint and T-Mobile will matter less to business because of their relative size. "Itll take years for T-Mobile to catch up," Passmore said. Passmore said that over the long run, businesses have more to worry about. He doubts, for example, that AT&T will do a lot to preserve net neutrality. Read more here about claims that AT&T helped the federal government spy on phone and Internet traffic. "The net neutrality agreement that they made as part of the merger has huge loopholes in it," he said. However, Passmore said that he doesnt think AT&T will make major changes in Internet access. "I dont think theyve decided that the revenue is worth the hue and cry from the blogosphere and the customers," he said. "I think overall its anti-competitive in that it reduces the number of players that exist, especially if youre in BellSouth territory," Passmore said. "In the long term its not a good thing for customers. Were seeing the emergence of two 800-pound gorillas for telecommunication services." "Customers do benefit," Regan said. "We are already bundling," he pointed out, explaining that the merger of the two companies will offer more to businesses in the long run than either company could have offered without it. "The more you bundle, the more you buy, the more you save. You can expect more of that approach to continue," he said. Check out eWEEK.coms for the latest news, reviews and analysis on mobile and wireless computing.

Wayne Rash Wayne Rash is a Senior Analyst for eWEEK Labs and runs the magazineÔÇÖs Washington Bureau. Prior to joining eWEEK as a Senior Writer on wireless technology, he was a Senior Contributing Editor and previously a Senior Analyst in the InfoWorld Test Center. He was also a reviewer for Federal Computer Week and Information Security Magazine. Previously, he ran the reviews and events departments at CMP's InternetWeek.

He is a retired naval officer, a former principal at American Management Systems and a long-time columnist for Byte Magazine. He is a regular contributor to Plane & Pilot Magazine and The Washington Post.

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