Sun, Nov 20, 2005 - Page 11 News List

SBC completes acquisition of AT&T

`BABY BELL' US regulators approved SBC Communications' purchase of its former parent, heralding a new era in the communications, entertainment and service industry

AFP , NEW YORK

Marking the end of an era in the telecommunications industry, SBC Communications on Friday finalized its US$16 billion acquisition of AT&T, creating the biggest US firm in the sector.

The companies sealed a deal in which SBC, one of the "Baby Bells" created in the 1980s breakup of American Telephone and Telegraph, acquires its former parent, the once-powerful "Ma Bell."

AT&T, a company whose history dates back to 1885, is being swallowed up in the deal.

But SBC has decided to adopt the storied AT&T name for the merged company.

"Today marks the birth of AT&T Inc and of a new standard-bearer in communications, entertainment and service for the 21st century," SBC said in a statement.

"The combined company is now poised to lead the industry in one of the most significant shifts in communications technology since the invention of the telephone more than 120 years earlier -- the deployment of integrated services based on Internet Protocol, giving customers access to virtually any services, anytime, anywhere," SBC said.

The new company and will start trading under the ticker symbol "T" on the New York Stock Exchange on Dec. 1. In the interim, it will trade under the existing "SBC" symbol. A new corporate logo will be unveiled tomorrow.

"Today is big step in the changes that are reshaping the telecommunications marketplace," independent telecoms analyst Jeff Kagan said.

"This merger of SBC and AT&T, and the coming merger of Verizon with MCI, are big, big news in the telecom industry. We have watched the industry change over the last 10 to 15 years. In 1996 the Telecom Act spelled out the rules of competition between the local and long distance telephone companies. The local companies have won that war and are acquiring the long distance giants," he said.

The new telecom giant will vie for the top spot in the market with Verizon, another Baby Bell which plans to complete its acquisition of MCI, the company formed following the bankruptcy of WorldCom, early next year.

Verizon/MCI and SBC/AT&T will each have more than US$70 billion in annual revenues. And both are involved in a full range of services from fixed line service to long distance to wireless and high-speed Internet.

Both are also working on plans for Internet-based television systems that will compete with the cable TV industry.

Consumer groups have complained that the huge mergers will diminish competition.

But Kagan said consumers will still have choices as the lines separating sectors fade.

"This is great news for the Bells as they gear up to compete with the cable television companies, and against each other," Kagan said.

"Yesterday we did business with both the telephone company and the cable television company because neither offered each other's service. But that is changing. Tomorrow we will be able to choose one or the other, the telephone company or the cable television company, and say goodbye to the other," he said.

"Over the course of the next year or two both sides will offer big bundles of services that look similar," Kagan said.

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