And the Winner Is...Cingular

By John Quain  |  Posted 2004-02-17 Print this article Print

Brinksmanship—and a lot of money—finally net Cingular the AT&T Wireless prize for a cool $40.7 billion.

The bidding war is over. Now Cingular can set about creating the nations largest cell phone network. Over the long weekend, Cingular Wireless and Vodafone Group PLC were engaged in a bidding war for AT&T Wireless. Vodafone matched each of Cingulars offers until the bidding got too rich for the U.K. firm. The final price tag: $40.7 billion dollars. Thats about $2.7 billion dollars more than some analysts had predicted for the final price. It translates into about $15 per share in cash. Cingular will also assume about $6 billion in AT&T Wireless debt. Cingular is a joint venture of SBC Communications and BellSouth, and its currently the countrys second largest wireless carrier. The new company, however, will have a total of 46 million subscribers, surpassing Verizon Wireless 37.5 million customers.
For wireless customers, the consolidation will doubtless mean higher prices. To date, the six major carriers have been involved in an internecine battle to gain market share, further sparked by the recent number transfer or so-called portability rules. On the other hand, customers may benefit if the new owners can improve what has been spotty service from AT&T Wireless.
Naturally, the sale will mean more layoffs in the deepening jobless recovery. It may also spark other deals in the industry as companies look to bolster their market positions through acquisitions. Now that the shouting is over, the deal needs the final approval of AT&T Wireless shareholders and the usual regulatory suspects.
John Quain John Quain is the Wireless Center Editor and wireless columnist for Ziff Davis Media. He is also the on-air Computer Consultant for CBS News, appearing regularly on the network's overnight newscast Up to the Minute for over 7 years. In addition, Quain does occasional reports for CBS News The Early Show and has been reporting on technology and related business and entertainment news for over 20 years. Quain has appeared regularly on ABC News, CNN, CNNfn, MSNBC, and CNBC.

In addition to his online and on-air work, Quain currently contributes articles about computers, the Internet, consumer electronics, and technology to PC Magazine, Popular Science, Esquire, and The New York Times. Other publications Quain contributes to include Rolling Stone, Entertainment Weekly, Men's Journal, Tech Edge, and Good Housekeeping.

Past positions Quain has held include working as a Contributing Editor at Fast Company magazine for 4 years and at PC Magazine for 9 years. He also wrote a technology column for Brill's Content magazine, was the gadgets columnist at My Generation magazine, was the daily Internet columnist for Time Warner's Pathfinder, and was the computer columnist at The Globe and Mail newspaper.


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