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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.""
It's been bought and sold so many times.
"Let's break up Ma Bell so that some 20 years later they will all merge back together to become an even more powerful and unstoppable force."
"Everything you know is wrong. (And stupid.)"
Moderation Totals: Wrong=2, Stupid=3, Total=5.
I might buy AT&T too. I love speculation. Who else might buy AT&T? Are you thinking about it? Raise your hand if you are thinking about anything else.
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I wonder if this is just a sign to come. 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. They will still have a purpose, of course, but they'll have to learn to be more competitive in a more competitive industry.
I store my recipes online (the way nature intended)
Isn't this illegal? Isn't the Baby Bells and AT&T supposed to stay separate?
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
Sounds like everyone wants to play...
I work for MCI. Color me curious.
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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.
You're right, at the current rate, there's just going to be another megaconglomerate. Luckily, the feds will have learned from their past mistakes, and know what to do next time this happens. What is this solution? Break them into smaller pieces, of course!
ALT="To all AT&T customers: we're here to stay" WIDTH="426" HEIGHT="60" BORDER="0" HSPACE="14" VSPACE="6"
Heck, I might even report this to the Register and get quoted as an "eagle eyed reader" like this guy did.
An Indian-American Hindu committed to non-violent thought/speech/action alarmed by the global explosion of radical Islam
rhombus
pretty good, but not great
The second thing to come to mind?
"We meet again, at last. The circle is now complete. When I met you I was but the learner. Now, *I* am the master. "
09 F9 11 02 9D 74 E3 5B D8 41 56 C5 63 56 88 C0
Before we get into it about rebuilding the hated Ma Bell of yesteryear, keep this in perspective. SBC is right now one of the four remaining RBOCs, or Baby Bells, formed from the divestiture of AT&T (the original national phone monopoly) in 1984. The RBOCs already provide national long distance service (opened to them following the Telecommunications Act of 1996). AT&T is mostly a pure long distance and data network (WAN) player these days. The Bells have to have network-sharing agreements to provide national LD service. Qwest has an extensive fiber LD network though. So this potential acquisition would add a national long distance and data network to an incumbent local service provider and give it a huge presence in the enterprise market. It would not create a new national phone monopoly or be the Son of Ma Bell. They would be a formidable competitor though.
Why would you, as SBC, be looking to put out more cash, if you just LOST cash last reporting period?
This must be that business sense i hear so much about.
Not only that, but as an AT&T customer, I'd be scared. SBC is, with the possible exception of CompUSA, the worst company I have to deal with day in and day out. Their tech support is a fucking joke, and their products and services are medocre at best.
Aside from that, do these mega-mergers ever actually, you know, work? Timewarner-AOL, HP Compaq?
Mod me down with all of your hatred and your journey towards the dark side will be complete!
"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...
...that they can announce 7K job cuts and then start making a play for a $15 billion+ acquisition.
I'm not good in groups. It's difficult to work in a group when you're omnipotent. - Q
never has this translation error turned joke applied more.
Anyhow, the telecommunications industry has changed dramatically since the breakup of AT&T, and the rationale for the breakup no longer exists. These days, cell phones are prevalent; competitors easily enter the market for cell phones, which can be used for local and long-distance calls. A re-united AT&T (SBC + Pacbell, which was purchases by SBC, + AT&T + Lucent, which includes Bell Labs) would not pose a monopolistic threat. Heck, a re-united AT&T would be no more monopolistic than Micro$oft.
Note that even the Internet poses additional competition in the telecommunication market. Many people use the Internet, via VOIP, to make telephone calls although they may not realize that their call is being routed via IP packets.
hmmm. 36-24-26 sounds pretty good to me!
Well, that's easy. They'll buy AT&T for $13,824,458,752.
Your brain is not a computer.
Well, a subsidiary (Cingular) "merged" -- more or less the same thing. A great day for me, as I have Cingular but live in a house only covered by AT&T.
1) Break-up AT&T
2) Destroy Bell Labs
3) Re-assemble AT&T
4) Profit??
[Insert pithy quote here]
This has been happening for a while ... I've always likened it to the scene in T2 where the bad robot is dropped in liquid nitrogen and shatters .... then slowly we see all the drops start to flow together to remake the evil robot again ....
This would be one interesting acquisition if it did happen, if for nothing else reuniting AT&T with one of its spinoff companies. AT&T has a lot of assets (well those that it hasn't sold off) mostly tons of fiber in the ground, not just in the U.S. but internationally as well.
AT&T is sort of caught in the middle of things, they have a failed local business, long distance is dieing (if it's not dead already), and a highly competitive market place for IP services. What else does AT&T have that everyone else doesn't? They don't have their research labs any more (Lucent - another company in a downward spiral, hopefully coming back soon) or their computer division (NCR) and anything manufactured today isn't made by good old Western Electric, it's just rebranded (or someone bought the rights to the name.)
It's sad to see one of the leaders in telecommunications and research in such a poor state of business. I miss the good old days. Many people forget that AT&T (well Bell Labs) invented just a few things like the transistor, laser, TV transmission, etc. not to mention built automatic mechanical exchanges (think crossbar switches!) in days when all there were was vacuum tubes.
I remember getting tours of the 'Labs back a decade or so ago, it was still impressive what they were doing with technology back then. A lot of wireless stuff that's coming out now was created by them. Supposedly during their peak they'd churn out 2-3 patents a day, every day of the year. They had people that would do just hypothetical research, sitting around dreaming about nothing but the big bang theory and getting paid for it. Now that's research.
1) Lose money
2) Spend lots of money for a company losing even more money
3) ?????
4) profit!!!!!!!!!!!!!!
So Long and Thanks for all the Fish.
> The New York Times says talks are fluid and sensitive.
IOW, there's a lot of spitting and cursing.
I think that a lot of the research that the 'Labs has done in the past is sort of forgotten about (oh lets just say a lot of modern electronics). It will be interesting to see if anyone does buy out Bell Labs at some point, it's worth a lot, and is in shambles because of budget constraints at Lucent. Maybe Lucent will turn around and buy AT&T, now that would be something to see...
Has there really ever been fair competition in the local markets though? Long distance sure, AT&T was riding on their good name (to this day a lot of people still think the phone company is AT&T). Local service is usually provided by the damn ILEC (Verizon, SBC) traveling on their copper. So no matter what company you choose to provide your dial tone, your ILEC is still getting a cut of the fee. Also you might get worse service, since the ILEC really doesn't want you to use some one else, your line might "accidentally have its cross connect removed". Don't say it doesn't happen.
I agree that AT&T and SBC aren't exactly a monopoly threat, but I see customer service suffering in the end. I have to work with AT&T and SBC regularly and they are horrible to deal with. I couldn't imagine a small business trying to get them to fix anything. The FCC seems ok with letting SBC buy back all the baby bells, I only hope that this time there will truly be competition.
I read that as "SCO might buy AT&T"
...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.
Land lines arguably still hold market power for local service. Combining that with wireless, etc. and it is possible that we will see a return of Ma Bell....
LedgerSMB: Open source Accounting/ERP
Looking at AT&Ts balance sheet tells a sad tale.
Sure they still have assets left over from the monopoly days, but they are rapidly disappearing. I hope SBC doesn't want them for their management skills, they have made some of the dumbest decisions in the business world. (IBM holds the record for picking MS to build their PC OS.)
Right behind it was AT&Ts decision to give in during the antitrust trial because they wanted to go into the computer business.
Lately AT&T has been selling every part of their business that has a chance of success, cable, wireless.
I say, let them die, they seem to have a death wish.
Just got done going through about 5 people whose accent was so terrible that I couldn't understand what they were saying half the time. And my DSL/PPPoE/Linux problem is still not solved because they only want Windows and Mac using their version of the internet!
That's like saying that Microsoft is no more evil than Satan, or maybe it's like saying something's no hotter than the sun. Or no colder than absolute zero
Experience tells us, and MS's court records confirm, that MS is a particularly nasty, convicted monopolist. No worse than that is faint praise indeed.
See what I've been reading.
Actually, one of the biggest problems that AT&T has faced was trying to remain profitable while remaining competitive in a market where one of its biggest competitors (MCI) turned out to be cooking its books to cut (apparent) costs.
Of course, it didn't help that the (now-former) senior management decided to spin off one of its most profitable business units (AT&T Wireless) because they didn't think the cell phone business would get off the ground. Ironically, now that Cingular is buying up that unit, AT&T proper is taking the name back so it can get back into the cell phone business.
cp /dev/zero ~/signature.txt
Why would you, as SBC, be looking to put out more cash, if you just LOST cash last reporting period?
Depends on why they lost money and what sort of a deal they can get. One down quarter isn't necessarily a big deal. AT&T has a real gem of an asset in their enterprise business and another in their network which I'm sure is why SBC is interested. They've talked before about a merger. BellSouth did too a few years back. But AT&T also has a lot of debt and some rapidly sinking businesses. SBC would have to rework or get rid of this debt for the merger to happen. But if SBC can get a sweetheart deal, it might make sense.
Personally, I think the deal is probably a bad idea. As I mentioned before, AT&T's debt load is a problem. There also are competitive issues. The merger could jeapordize SBC's relationship with BellSouth which jointly owns Cingular with SBC. Plus there is the question of whether it can pass regulatory scrutiny; something that is by no means assured. I don't see any obvious way to fix AT&T's problems but I don't have all the facts either.
Actually, it might help competition. SBC/ATT would compete on far more products with the other ILEC's, than they do currently. The results could be interesting.
"To those who are overly cautious, everything is impossible. "
AT&T is, alas, a sad shadow of its former self, and by that I mean its post-divestiture former self. But it is still a significant competitor, both the largest long distance company (a declining-revenue market, to be sure) and a significant local player (its TCG is a big player in metro fiber). Plus they've got some ISP operations. It would be sad to see Ed's Evil Empire get a hold of them.
;-) If he gets AT&T, he feels his P. is again bigger than that of Ivan Seidenberg of Verizon (or especially Ivan's predecessor Ray Smith, whose ghost hangs over the place).
Ed Whittacre wants them for the same reason he bought SNET and AT&T Wireless (which was not owned by AT&T at the time) -- he's constantly trying to be bigger than Verizon. I call it a "P.D." contest, where "D." stands for Dimensions. Frank Zappa had a song by that name, in case you can't guess what the dick I'm talking about.
AT&T's core problem is that they are operating in highly competitive markets, and their internal culture grew up in a monpopoly and never adapted. SBC, on the other hand, is, uh, well, if the question is acting competitive, they're like asking a tropical fish to be a downhill ski instructor. Without monpopoly power, SBC is dead meat.
I would not consider NCR a child of AT&T. AT&T bought it and later sold it off. Ameritech became part of SBC, not Verizon.
"To those who are overly cautious, everything is impossible. "
I hope not, we use SBC for our phone bills but AT&T DSL Service... so hopefully SBC won't rid us AT&T'ers of our 1.5Mbps connection and replace it with their cr@ppy 384Kbps connection...
Debugging? Klingons do not debug. Bugs are good for building character in the user.
Cingular already bought AT&T Wireless. For SBC (40% owner of Cingular) to buy the remainder of AT&T would be a smart move on their part. It's my impression they're doing it for access to the marketshare rather than any infrastructure or technology they have. What SBC wants is more customers, this is a very direct way to do it.
I do wonder if this will mean SBC can sell local service beyond the 13 state region they are currently in?
I don't think Lucent owns Bell Labs. I believe Bell Labs was owned by SAIC and operated under the Telcordia name.
Recent press release:
SAIC SIGNS AGREEMENT TO SELL TELCORDIA TO PROVIDENCE EQUITY AND WARBURG PINCUS
If SBC does take over AT&T, they need to keep the AT&T name and the deathstar symbol. Please don't adopt a really stupid name, like, say, Verizon. BELL ATLANTIC FOREVER!
Southeastern Virginia REPRESENT!
the research triangle in North Carolina, consisting of Duke University, UC-Raleigh, and one other university
UC-Raleigh? You must be a Californian. I mean, even if you completely ignore sports you've surely heard of a guy named Michael Jordan (no not that one). It's UNC. Adding the qualifier Chapel Hill is even a little pedantic. Also, the other school you were looking for is NC State.
Never underestimate the power of fiber.
Depends on what you are talking about. It is not a competitor in consumer markets, but if you want a global network services provider, AT&T is without equal right now.
No division of AT&T has ever actually won over customers based on value,Gartner suggests otherwise.
No amount of transformation will ever allow AT&T to be a true free market competitor.How do you figure that? The company that calls itself AT&T today is not the company that was AT&T 20+ years ago. Times have changed.
OK, so you hate AT&T. Fair enough. I know that bashing Microsoft is good for an automatic +5 insightful, but I did not realize that AT&T bashing worked too. Do you actually work for AT&T or do business with them at the moment?
*** Where are we going? And what's with this handbasket?
Doesn't MCI own Sprint?
In fact, I thought their strategy of being a worldwide, full-service data provider was a good one. Too bad (1) they overpaid for the cable assets (2) Worldcom was cooking their books, driving Wall Street to demand equal return from AT&T. Which they couldn't do since they weren't cheating (anywhere near as much anyway).
sPh
SBC has history of poor customer service. The following two issues are examples of my experience with SBC.
1. The short story is that SBC owed me ~$100 bucks. Over the course of a year, I spoke to several SBC reps over the phone to get back my money. Each time I was told a check would be cut and/or someone would call me back about the issue. I finally decided to sit down and state the facts in a well organized letter to SBC Customer Service (with legal overtones) with attached "exhibits". Lo and Behold, the day SBC receives the letter I get a call (apology) directly from its Executive Office. Within a week of this conversation I have my money.
2. SBC DSL tech support closed my trouble ticket without contacting me as they said they would. But more importantly, they closed the ticket without fixing my problem.
Better for everyone except the customers. Somehow we seem to keep getting lost in all of this. Honestly, I don't see how allowing that Southern Boys' Club otherwise known as SBC to become even more all-encompassing can be construed as a "good thing" to anyone but the upper management of SBC and AT&T. Give me a month's pay for one of those guys and I could probably retire early.
But, if you're going to commit an antitrust violation of potentially Biblical proportions, best to do it during the balance of the Bush Administration's tenure. Breaking up illegal monopolies is not one of Curious George's priorities.
The higher the technology, the sharper that two-edged sword.
I'd rather see them merge with Agilent, at least that way they'd have someone to commiserate with about the destructive short-term thinking so prevalent in the business world. Oh, and how Carly Fiorina is a total fuckwit but nobody can say it for fear of being labeled a sexist.
if one of the RBOCs buys lucent, they're in for a surprise. ATT/lucent fell off a lot of RBOC purchase lists when ATT started getting aggressive about stealing customers from the bells.
imagine it this way... lucent knows what your internal network is, because they bid it and coordinated designing it, when you bought their switches. they know it to the turns of the bolts that hold it to the rack, because likely as not, you outsourced the keeping of the switches to lucent field suppport. and now, a competitor wants to buy your supplier?
for that reason, I don't suppose that lucent or nortel or alcatel or fujitsu or any of the major vendors want to cuddle up at the boardroom level. bang, you have no external customers any more. not calculated to get wail streak happy about you in a geniunely pissy stock market right now.
if this is supposed to be a new economy, how come they still want my old fashioned money?
That has totally turned around. The valuable part of the deal turned out to be the local wire monopoly. Being #1 in a competitive long distance market turned out to be of minor value.
Is this what passes for an argument these days?
Jeremy
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If we can get the corporations out of our airwaves and build wireless mesh networks, we won't have to worry about monopolies. That should be the goal.
I think we need to realize that the new offspring of SBC/AT&T won't be nearly as powerful as the original. I mean, in the days of Ma Bell you couldn't even buy or sell a telephone except through them. Also, with the huge wireless/cell market today, which AT&T is already dropping out of if they haven't already, land lines aren't the only option, and some people have stopped using them altogether. It's true that this new corporation would own most of the major communications lines throughout the country, but SBC already does anyway, and you can already find their service charges on your monthly bill. As a matter of fact, SBC doesn't own all the major lines--Qwest owns a few of the major fiber data channels.
However, that said, this merger would put the new 'SBCT&T' at a large advantage over the other phone carriers, kind of like a big teenager stealing the kindergarteners' milk money as they walk to school.
No shot, Sherlick. I moved last August, and was unable to continue my Comcast Digital Phone service (it used to be from AT&T Broadband until Comcast bought them.) I was very happy with the service, it was inexpensive and never failed.
However, the townhouse I moved into has an "association" (sounds vaguely Mafiaesque, doesn't it) that decides what you can and can't do on the outside, and they refused to let Comcast mount the network interface box. So I was forced to go back to SBC. When I signed up for their "service" they told me it would be about $40 to install, since the house was already fully wired. I got a bill for three hundred and fifty dollars for my trouble. They had a list of a dozen different fees, including $200 for the installer's "labor" which including wiring my two lines backwards. That dimbulb spent about ten minutes inside and then left. Rather than get another $300 bill I just fixed them myself. The supervisor I spoke to said they had to go by the hours their installer pencilled in and refused to write off any of the charges (in other words, we are lying bastards and you, dear customer, can go fuck yourself.) God I hate SBC. Whatever you want to say about AT&T, the Slippery Bastards Club is worse.
Sure makes me glad they broke up old AT&T. Yes, okay, I can connect anything I want to my phone line, and I can even maintain my own inside wiring. But other than that, I really feel that our nation's communications infrastructure is in a truly sorry state.
The higher the technology, the sharper that two-edged sword.
But Tommy Lee Jones is in the commercials!!!!
One of the key things that hurt AT&T since the divestiture was the inability to compete on price, they unlike all other carriers were subject to regulation by the FCC. So when a competitor comes out with a great new offering, it took a long time before AT&T could match since they had to get permission to do so.
The FCC extends its Competitive Carrier deregulation of the interstate telephone industry, ruling that it will rely on market forces instead of regulation to control the rates of all carriers except AT&T, under a policy known as "forbearance."
I fail to see how Bell Labs could be funded any better from a single Baby Bell than it is now through Lucent. The days of the monopoly are long over and no telco is going to be able to support the premium of the Bell Labs of old. Lucent curently offers services and equipment to all the Baby Bells, AT&T, wireless carriers, cable providers, as well as other telcos globally. This is a marketplace where Lucent has many global competitors. Some of the revenue from these offerings goes back into Bell Labs to develop better offerings. So Bell Labs has to be more focused on business needs than under a government endorsed monopoly and a lot of research simply had to be eliminated.
That is called capitalism.
It takes a monopoly to support the Bell Labs of old. That is either a government funded effort or perhaps Microsoft. In a competitive market, long term research with risky far off paybacks can't be supported.
Disclaimer: I am a Lucent employee speaking my own opinion. I am currently working on an AT&T contract.
If you had my real name, you'd use an alias too.