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SBC Might Buy AT&T
ChipGuy writes "SBC is in talks to buy AT&T according to Wall Street Journal and New York Times, both reporting price tag to be between $15-and-$16 billion. The news comes close on heels of SBC reported weaker earnings and 7000 job cuts. The New York Times says talks are fluid and sensitive. Wall Street Journal says, "a major acquisition would speak to SBC Chief Executive Edward Whitacre Jr.'s aim of turning the company into a national brand and his desire to do at least one final deal before he retires." Om Malik writes that "buying AT&T will make sense for anyone, and not just SBC. Why? Because AT&T still is the only game in the enterprise markets. MCI is hurting and Sprint clearly wants to focus on wireless. That leaves AT&T in a pretty good shape.""
Step 1: Reuinite the Bells Step 2: Use uber resources to roll out fiber (which they apparently don't have to share like their copper) Step 3: Regain monopoly
Sure, but the DOJ doesn't care. And they won't care when it becomes MS-SBC either.
You are being MICROattacked, from various angles, in a SOFT manner.
AT&T is not exactly a competitor at the moment. They have never been a competitor. They were designed from the ground up to be a monopoly provider, which they were for many years. Once their monopoly status ended, they coasted by on their reputation for about another 10-15 years, and then once the long distance market became truly competitive (beyond 3 major players) they pretty much fell apart. No division of AT&T has ever actually won over customers based on value, since they've historically been unnecessarily expensive. Without a buyout, AT&T will just wither up and die, as they are already close. No amount of transformation will ever allow AT&T to be a true free market competitor.
"a major acquisition would speak to SBC Chief Executive Edward Whitacre Jr.'s aim of turning the company into a national brand and his desire to do at least one final deal before he retires."
Let us hope he dies first.
and his desire to do at least one final deal before he retires
People always tell me that business leaders make their decisions based on hard facts and money. They're just as driven by vanity and shiny new things as the geeks are. They're just less honest with themselves ab't it...
...With things like the internet (skype?) hurting the traditional phone companie's revenue streams, and with the slow but steady emergence of VoIP, the big phone companies days are numbered.
Maybe but I doubt it. True, the days of POTS as a cash cow probably are numbered, though we could argue about exactly how much time the have left. But that hardly makes SBC, Verizon and the rest helpless. Someone still needs to deliver a connection to the curb. Despite increasing comptition from cable companies and wireless, the Baby Bells do have a large installed network that isn't easy to replace. Yeah, margins will get squeezed but someone will have to maintain that wire and there is money to be made there.
VOIP is still in its infancy (I say this as somone who uses Vonage daily and likes it) and needs easier installation and greater reliability before it replaces POTS to a large degree. Businesses will probably adopt it earlier but residences are going to take a while. Yes, it VOIP is the future but it's going to take a while and there's nothing preventing SBC and the rest from getting into that business.
As for wireless, SBC and Verizon are the #1 and #2 wireless providers in the US. Both are well positioned there. WiMax/WiFi is a potential threat in that it could make the last mile problem easier, but someone still has to provide the back end for that traffic and it isn't without its problems. (security, frequency crowding, availibility, speed, etc) And again, there is nothing preventing the Bells from competing here either.
So yes, SBC and the rest have their work cut out for them, but I wouldn't bet against them at this point. We're likely to see further consolidation as telecomunications becomes more and more of a commodity business but that doesn't imply that the Baby Bells are going to disappear any time soon. Change? Yes. Disappear. Doubt it.
Lucent Technologies is the spinoff company that was formed from Bell Labs.
I think this would be great. Yes, it may create another monopoly, but also a highly regulated monopoly, also a monopoly that has fierce competition from the wireless market (something that didn't really exist when the breakup occured). It may also bring us back Bell Labs, which was by far the best research group in history (my opinion, of course).
If the merger were to go well, I think it will be a great step forward in the markets they pariticipate in.