Now Cingular Wireless LLC gets to reap the rewards -- and face the challenges -- of its new status as the nation's biggest cellular provider.
Cingular's $41 billion merger with AT&T Wireless Services Inc. closed yesterday, hours after the Federal Communications Commission granted final regulatory approval. The merger creates a cellular giant with more than 47 million customers in 49 states.
The company said the combined resources will mean better, faster and cheaper services for customers. Still, Cingular must begin a two-year task of stitching together networks, billing systems and customer-care operations around the country -- and trying to do so without inconveniencing or alienating customers.
"What keeps me awake is what I don't know" about AT&T Wireless's operations, Cingular President Stanley T. Sigman said in an interview. By law, Cingular had to plan details of the integration without seeing its merger partner's internal data until the deal was approved.
"We've been planning a wedding without talking to the bride," Sigman said.
Analysts have said competitors like Verizon Wireless, now the second-largest carrier, will try to exploit any missteps during Cingular's integration process.
Last year and early this year, AT&T Wireless suffered a series of software and customer problems that damaged its reputation and severely eroded its sales. However, Sigman said Cingular's management has extensive experience merging operations, and Cingular doesn't expect disruptions.
This week, Cingular will begin a multimillion-dollar national advertising campaign to promote the merger, and signs at more than 1,000 AT&T Wireless retail stores will change as soon as possible, Sigman said.
Within the next few weeks, both companies' customers will get better network coverage as the two networks are combined, Sigman said. He also promised more customer care and options for service and handsets.
AT&T Wireless customers will not be required to change phones or calling plans, even if their contracts run out. As of Nov. 15, those customers will have the option of switching to Cingular's plans, which allow customers to "roll over" unused minutes into the next month, but customers doing so will have to purchase a new Cingular phone.
By Thanksgiving, at the start of the holiday shopping season, procedures and offers to new customers at former AT&T Wireless stores should be the same as at other Cingular stores, Sigman said. And the company will start rolling out a high-speed wireless Internet service nationally by the end of next year.
The deal closed after the companies received approval from federal regulators, who required Cingular to sell AT&T Wireless's business in some smaller markets to blunt the merger's anti-competitive effects. Cingular is a joint venture between SBC Communications Inc. and BellSouth Corp., two of the dominant local phone providers in the South and Midwest.
The Justice Department granted its approval Monday but required Cingular to sell stores, customer contracts or cellular airwaves in 13 markets. The FCC required Cingular to sell AT&T Wireless's business in 16 small markets, most of which overlapped with the Justice Department's required divestitures.
Those areas included cities in Oklahoma, Kentucky, Connecticut, Texas and Missouri.
Additionally, the FCC required Cingular to sell airwave licenses where the merged company would control more than 80 megahertz of the 189 megahertz of spectrum available in a market. It also prohibited Cingular from participating in a coming airwave auction in markets where it controls 70 megahertz or more of the airwaves. The company must also unwind its joint venture with T-Mobile USA Inc., with which it shares networks in California, New York and Nevada.
Consumer groups said the merger between two mega-companies could result in higher prices and fewer options.
"This is an enormous retreat from past antitrust policies that promoted competition in the wireless market," said Gene Kimmelman, director of Consumers Union in Washington.
Cingular and its parent companies control a swath of the telecommunications market and will be able to sell bundles of wireless, local, long-distance and Internet services that other independent carriers, such as Reston-based Nextel Communications Inc., may not, Kimmelman said.
Shares of SBC closed down 24 cents yesterday at $24.75. Shares of BellSouth closed down 39 cents at $26.03.