AT&T buys Cingular for $26 billion: Coming Full Circle
AT&T buys national cellular provider Cingular Wireless. This huge deal brings AT&T, or the original company American Telephone & Telegraph Company created by Alexander Graham Bell himself, full circle. In 1983 AT&T was broken up as a result of U.S. antitrust action. This broke AT&T into 7 smaller regional communication providers each heavily restricted by the government. Then the Telecommunications act of 1996 opened the door for the original Bell companies to begin their path to reuniting and trying to recreate the communications monopoly they once enjoyed. Their most recent purchase of Bell South or Cingular Wireless for $67 billion was a steal seeing as how Cingular, in 2004, purchased AT&T wireless for $41 billion.
Cingular’s purchase of the smaller and only regional player, AT&T wireless, in the wireless communications helped rally them to become the nations largest wireless provider. However seeing as how Cingular’s customer base has now grown to 59 million subscribers and Cingular paid $41 million for AT&T wireless in 2004 AT&T just got a steal. Let’s do the math. Cingular pays AT&T $41,000,000 and then AT&T buys Cingular for $67,000,000.
$67 billion
- $41 billion
= $26 billion
AT&T really bought Cingular Wireless the nation’s largest wireless provider for only $26 billion. That’s phenomenal. I’m not a conspiracy theorist but I highly doubt that this wasn’t thought out way before AT&T sold their wireless division to Cingular 2 years ago. If they didn’t then they’ve got some great luck that this deal came back around their way.
As you see in the image about, that was provided by www.wikepedia.org, you can see how AT&T was broken up and then just like Humpty Dumpty put back together again. So what does this mean for customers? Better services, lower prices, or none of the above? Most likely as is predictable with monopolies we will see none of the above. Overall, a great business move by AT&T, but a bad deal for consumers.
Some things have changed since 1983 when AT&T was broken up and there are a lot more players in the game which means that other carries if smart will see this as an opportunity to grab customers as they run away screaming from AT&T. They should have sales reps outside of every AT&T store and service center just waiting for those abused customers to come running to the cozy view of a friendly new provider.
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