News Analysis: Industry watchers contend that the merger of Cingular Wireless parents AT&T and BellSouth should help the former joint venture win more deals with enterprise customers and mobile applications users.
The proposed merger of AT&T and BellSouth could help to expedite and streamline operations at the companies mobile communications joint venture, Cingular Wireless, and potentially create new business opportunities for the firm, industry experts said.
Under the companies existing makeup, AT&T already had the majority share in Cingular, with 60 percent, giving it voting power in any decisions involving the boards of directors.
But ownership will simplify operations and help customers to integrate their wired and wireless services among other advantages, company officials said.
"This streamlines the management structure in terms of the way we respond to our owners," said Mark Siegel, a spokesman for Cingular in Atlanta.
"Right now, each company has its own board and then there is a separate board that governs the joint venture," Siegel said. "Now it will just be part of one company, with one set of share owners, and thats going to make decisions a whole lot easier."
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In terms of doing business with the wireless carrier, which boasts an estimated 54 million customers today, Siegel said that customers will benefit from unified service operations in the short term, and the creation of new products and services down the road.
"There is work going on to provide products that integrate in a seamless way wireless and wireline," he said. "If you are a business customer, chances are good you want to deal with one person for all of your technology needs, and with this merger youll be able to call on one person for wireline, wireless, etc."
However, the spokesman conceded that it will be a while before customers actually have this single point of contact, as there is currently no timeframe for closing the deal and the AT&T-BellSouth marriage will likely face detailed scrutiny from industry regulators.
For the time being, Siegel said, it will be business as usual for all the involved parties. The two firms have agreed that Cingulars headquarters will remain in Atlanta regardless of the proposed mergers outcome.
Industry watchers said that beyond the issue of decreased competition as the result of watching two major telecommunications players come under one roof, customers should benefit from having Cingular managed by one integrated company, rather than being controlled by firms that compete in other areas of their businesses.
According to Phillip Redman, analyst with Gartner, it makes sense for AT&T and BellSouth to pursue their merger right now because both firms are already going through major transitions.
AT&Ts current operations were formed through the $16 billion buyout of its former parent, AT&T Corp., by SBC Communications in 2005, while Cingular has absorbed the firms AT&T Wireless division, acquired by BellSouth and SBC, for roughly $32 billion in 2004.