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Cingular completes AT&T Wireless acquisition

Cingular Wireless has completed a $41bn (£22bn) acquisition of AT&T Wireless Services, creating the nation's largest wireless carrier, following approval from two US government agencies.

The merged company will have 46 million customers, compared with over 40 million for Verizon Wireless.

Cingular officials said work immediately started on integrating the services of the two companies. The two companies' wireless networks will open up to each other immediately, creating expanded coverage for customers, said Stan Sigman, president and chief executive officer of Cingular. Sigman called the merger a "new day" for wireless customers.

The merged company will begin marketing wireless service under the Cingular brand by late November, company officials said.

Consumers will benefit from the deal, said Ted Neeley managing director with RHK, an analyst firm. The merged company will have more money to spend on network upgrades and can amortise those expenses over a much larger group of customers, he said.

One of the perennial complaints about AT&T Wireless was its network and the merger with Cingular should help improve that situation, Neeley said.

Representatives for handset manufacturers Nokia and Audiovox declined to comment on the show floor. Nokia and Audiovox both make handsets for the GSM/GPRS networks used by Cingular and AT&T Wireless.

Kyocera Wireless, which focuses exclusively on the competing CDMA (Code Division Multiple Access) technology, will not see a direct effect from the merger of the two companies, said Mary Palmer, a spokeswoman for the company.

But further consolidation among other mobile phone carriers will eventually reward handset manufacturers that consistently develop innovative products, she said.

Officials have also said that they plan to lay off some of its 68,000 employees in 2005.

Cingular officials have not determined how many people will stay at AT&T Wireless' headquarters, Sigman said.

Sigman will continue to serve as the president and chief executive officer of the merged company and Ralph de la Vega will continue as chief operating officer.

Cingular was formed in 2000 and is jointly owned by SBC Communications and BellSouth. Cingular had more than 24 million subscribers before the merger, and in 2003 earned revenues of approximately $15.5bn.

Grant Gross and Tom Krazit write for IDG News Service


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