Change is coming for AT&T Wireless's 21.7 million customers -- although they wouldn't know it from watching the company's commercials or shopping in its stores.
The cell phone provider is expected to complete its $41 billion merger with Cingular Wireless within weeks. Approval from the Justice Department and the Federal Communications Commission is expected, although potentially with some strings attached.
If all goes as planned by the companies, Cingular will eclipse Verizon Wireless as the nation's biggest wireless company, with 46.7 million customers. It will start changing signs, displays, and computer systems in the more than 1,000 retail stores owned by AT&T Wireless Services Inc.
Within months of regulators' approval, AT&T Wireless customers can expect the screen on their phones to display the Cingular name, company executives said, and their bills will start arriving in Cingular envelopes.
Although some analysts warn that any merger this big can run into unexpected problems, the companies said the process will be painless for consumers. They said existing contracts will stay in effect, and customers won't have to buy new phones.
Yet many customers may not realize they are about to be handed off to a different brand.
AT&T Wireless continues to take out full-page advertisements in newspapers and air primetime commercials on television, none of them mentioning the expected sale to Atlanta-based Cingular. The company also has continued to introduce services, phones and plans geared toward locking customers into contracts that would extend well into the merger.
"This is the first time I've heard of it," said Pat Keeton, an administrative assistant who lives in Takoma Park, when asked about the merger after browsing an AT&T Wireless store in downtown Washington this week. "They don't have anything about that in the store."
That's because the companies are legally prohibited from discussing their pending merger, or advertising it, until it's approved by regulators, said Peter Rowe, an AT&T Wireless spokesman.
At the FCC, Chairman Michael K. Powell and Commissioner Kevin J. Martin already have voted to approve the deal, according to sources close to the agency who declined to be identified because of the ongoing deliberations. Approval requires three votes from the five-member commission. The chairman has recommended that Cingular be required to divest stores and customers in about 10 markets where the combined companies would dominate the cellular business, some of them in rural areas, the sources said. Most customers would not be affected.
But some FCC staff members have echoed the concerns of consumer groups that the merger would concentrate too much market power in the hands of local phone giants SBC Communications Inc. and BellSouth Corp., which jointly own Cingular, the sources said. Critics of the deal argue such concentration could hinder competition between wireless service providers and their land-line counterparts.
Since the merger was announced in February, Cingular has had to plan for the integration without sharing internal data or marketing plans with its proposed merger partner. At the same time, AT&T Wireless, attempting to stem a continuing loss of subscribers, continued to market its own phones and calling plans.
The Redmond, Wash., company spent millions on a marketing blitz during the Summer Olympics in Athens, even though its brand name will revert six months after the deal's close to its former parent company, AT&T Corp. The former "Ma Bell'' plans to resell cell phone services from Sprint.
For Cingular, the merger will be a long-range project. Company officials said it will take as long as two years to fully combine equipment in each of the markets where Cingular and AT&T Wireless now overlap.
Customers of both companies may experience more immediate benefits, company officials said, because calls will more easily roam from one network to the other, filling in gaps in coverage and "dead zones."
"Once the merger is approved, the combined networks will provide better coverage for both Cingular and AT&T Wireless customers," said Clay Owen, a spokesman for Cingular.
Odmea Santos, a Washington resident who has had AT&T service for more than five years, said she hasn't had a problem with the service and doesn't expect any glitches with the merger. "I think everything's going to be fine," she said after purchasing a phone this week.
But some AT&T Wireless customers may welcome a change because of the company's past problems.
Lauren Mabechi, who is 10 months into a yearlong contract with AT&T Wireless, is eager to switch to another provider.
"Personally, I'm through with it; I can't get service in my house," he said, adding the company told him he was not permitted to exchange his phone for a different model without paying for the new phone. "Is that the best way to treat a customer? I don't think so."
Late last year, AT&T Wireless faced glitches in its customer-relations software and suffered poor customer reviews, including from Consumer Reports and J.D. Power & Associates.
"Cingular hasn't had the high-profile glitches that AT&T had," said Jonathan Atkin, an analyst with RBC Capital Markets, an investment firm. This year, he added, the companies expanded their network-sharing agreement, which has already improved both companies' coverage.
Last month, J.D. Power rated service from both Cingular and AT&T Wireless at the middle or lower end of the pack. T-Mobile and Verizon generally ranked at the top in the research firm's regional surveys.
For Cingular, the risk is that the merger will cause confusion for both companies' customers, said Kirk Parsons, senior director for wireless services at J.D. Power.
"We find that at least in the short term, there's a negative impact for both companies" involved in a merger, Parsons said. "Customers in general don't like change." Problems could emerge with anything from billing systems to customer service, he and other analysts said.
That leaves an opening for rivals like Verizon Wireless, which in the first half of the year added 2.9 million customers to its network -- about three times Cingular's subscriber growth during the same period.
"We'll have a couple of tricks up our sleeve," said Howard Waterman, a spokesman for Verizon Wireless, declining to elaborate for competitive reasons. "The biggest thing we have going for us is our reputation, and we're going to leverage that."
The marketing blitz, and the battle for customers, is likely to intensify once the merger closes, market analysts said.
Each carrier will step up spending on advertising, said Jane Zweig, chief executive of the Shosteck Group, a Wheaton-based research firm, and may offer new plans and discounts.
That could be good news for cellular customers like Kimberly Hall, a postal worker and Clinton resident who's in the market for a new phone and is shopping around for different carriers.
"I just want a cell phone where you can use it without dropping calls," Hall said. "My sister said I should get Verizon [Wireless], but my supervisor has Cingular. He says Cingular's going to be the biggest company, so he's proud of his service."