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Merger between Cingular and AT&T Wireless
Scenario Comparison
In 2004 the Justice of Department approved a merger of $41 billion between Cingular Wireless, LLC and AT&T Wireless Services Inc. Cingular is the number one cell-phone provider in the United States and AT&T is the largest telecommunication company in the United States and one of the largest in the world. Combined, these two companies expanded with more than 47 million customers. But in the fourth quarter of 2004 Cingular reported a loss of $117 million. Even though Cingular attracted 1.8 million new subscribers in the fourth quarter the company was still hurting because of the expenses due to the merger with AT&T Wireless.
Company Response
As a global telecommunication provider AT&T Wireless opened a new door for Cingular. Cingular will have a global reach by offering new data services to its current clients. Being ahead of the competition, Verizon Wireless, Cingular and AT&T Wireless had to be more innovative. They started by introducing new services to the current and potential clients. Cingular started accessing both GMS networks to all clients without roaming charges and allowing unlimited mobile-to-mobile calls to Cingular or AT&T Wireless customers. Additionally, they started offering Universal Mobile Telephone Service and the fastest 3G network in the U.S.
Results of Company’s Response to Situation
The new data services have been working well for Cingular or AT&T Wireless. “Revenue in the April-June quarter was 8.61 billion, compared to 4.19 billion a year ago” (Associated Press, 2005). In the second quarter of 2005 Cingular added ...