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Cingular agrees to buy AT&T Wireless

Author Message
Mark







PostPosted: February 17, 2004 12:54 PM 

As published by MSNBC.com:

Cingular agrees to buy AT&T Wireless
Deal would create nation’s largest cellular carrier

The Associated Press
Updated: 11:28 a.m. ET Feb. 17, 2004

ATLANTA - Cingular Wireless won the bidding war to acquire AT&T Wireless Services for nearly $41 billion in cash, a deal that would create the nation’s largest cell phone company.

The merger between the second and third largest U.S. wireless companies was announced Tuesday as Britain’s Vodafone Group PLC withdrew from the contest after four days of rising bids.

Combined, Cingular and AT&T Wireless will have 46 million subscribers, enough to leapfrog Verizon Wireless’ market leading customer base of 37.5 million.

AT&T Wireless chief executive John Zeglis will not remain with the combined company once a deal is approved, he told reporters Tuesday in a conference call. Cingular CEO Stan Sigman will be chief of the company, Zeglis said.

“I’ll hang around anytime Stan wants me to and then I’m onto the next thing,” Zeglis said. Pressed on the issue, he said he would not remain with the company after closing, adding “We don’t need two new CEOs.”

Guzman and Co. analyst Patrick Comack said he didn’t think the deal would lead to higher wireless phone prices for consumers. “You still have some very aggressive competitors out there. Customers still have five choices,” he said.

Cingular, a joint venture between SBC Communications Inc. and BellSouth Corp., said its winning bid was for $15 per share, an amount that would value AT&T Wireless at $40.7 billion.

That includes the 16 percent stake in AT&T Wireless held by NTT DoCoMo of Japan, a BellSouth spokesman said. Cingular will also assume $6 billion of debt owed by AT&T Wireless.

The agreement, subject to the approval of AT&T Wireless shareholders and regulatory authorities, may be the largest all-cash transaction in U.S. history, said David Caouette, spokesman for AT&T Wireless.

The combined company will carry the Cingular name and once a deal is approved billing and other operational functions will be merged, though there will be no immediate impact on customers, said Ralph de la Vega, Cingular’s chief operating officer.

He said federal regulators may ask the combined company to divest certain assets where there is overlap.

“We think that there should not be any divestitures required,” de la Vega said. “The greatest competition is perhaps right here in the U.S. so the consolidation of two of the players should not cause any problems for competitors. Even in areas of overlap, there is sufficient competition not to warrant it.”

As far as possible job cuts or management changes, de la Vega indicated there could be some, though he would not elaborate. The combined company would have about 70,000 employees.
“We will look at the combined operations and look for where there is overlap and see where we can be more efficient,” he said.

Caouette of AT&T Wireless said some employees would be affected because large-scale mergers create “duplicate functions” that can be eliminated. AT&T Wireless had already planned to cut 1,900 jobs from of a work force of 31,000 by the end of 2005.

The analyst Comack said he expects there to be significant layoffs because there is so much overlap between the companies.

“They don’t need the AT&T Wireless employees at all. They might save some salesman, but everything is redundant,” Comack said. “Cingular doubled their customer base and doubled their spectrum, but they can run that with the same amount of employees.”

In addition to paying AT&T Wireless shareholders a 27 percent premium over the company’s closing stock price of $11.82 on Friday, the merger could reduce the fierce competition that has driven down prices in the U.S. cellular market, trimming the number of national players from six to five.

Zeglis, the AT&T Wireless chairman and CEO, said in a statement that the transaction means “a handsome return” for investors, advantages for customers and more opportunities for employees.

The deal brought to an end a heated bidding war between Cingular and Vodafone that saw both companies boosting their offers following a Friday deadline to submit bid set by AT&T Wireless.

Cingular, which had 23.4 million customers late last year, opened its bidding at $13 a share, or $35 billion, two sources told The Associated Press on condition of anonymity. It then raised its offer to $14 a share early Monday; Vodafone matched Cingular’s offers in each stage of the process, a source said.

De la Vega said the bidding heated up early Tuesday when Cingular raised its bid a final time to more than $40 billion. He said it is not clear if Vodafone dropped out of the race before or after Cingular upped its bid.

A Vodafone deal would have required the British cell phone giant to sell its 45 percent stake in Verizon Wireless.

After announcing it had dropped out, Vodafone said Tuesday that it remained “committed to its existing position in the U.S. market with its successful partnership in Verizon Wireless.”
AT&T Wireless’ share price has risen steadily in recent weeks on news that it was putting itself on the auction block.

The carrier, based in Redmond, Wash., has more than 22 million subscribers, including a sizable base of corporate clients who tend to use more services and spend more money.
However, the company has struggled in recent months.

Late last year, it couldn’t add new subscribers because of a glitch in a new software system designed to improve customer service.

AT&T Wireless also has acknowledged that it lost more customers than it gained under new federal rules that took effect in late November allowing cell phone users to change carriers without losing their phone numbers. The company has not released specific figures.

Ex-Cingular Customer







PostPosted: October 3, 2006 10:15 PM 

A CAUTIONARY TALE

Sometimes it is impossible to figure out exactly what some people (and /or corporations) are thinking.

My combined experience today with RadioShack, an authorized Cingular reseller, and Cingular service/support while trying to:

1) Upgrade my account to a more expensive shared plan,

2) Purchase four new phones,

3) Transfer two customers from Verizon,

4) Transfer an additional customer from Nextel,

proved to be so frustrating that when my contract expires in a few months there is absolutely no doubt that I will be contracting with another service provider.

Now, going into the transaction I knew that I would be giving up the nearly 3,200 - that's right, more than 3,000 - Rollover minutes that I have accrued thus far. Until earlier today I was willing to give them up in order to consolidate the various cell phone accounts in our family under what I had, until today, thought of as a customer service oriented company.

Initially we had gone to the local Cingular retail outlet, however, due to the nature of the work myself and one of my family members do, we require phones that do not come equipped with a camera. Well, the Cingular outlet only had two such models on display, one of which (the flip phone) was out-of-stock.

At this point we should have just walked away and looked for another provider for the three other lines; however, we decided to see what RadioShack might have to offer. We were initially encouraged by the fact that they had a flip phone without a camera that seemed to be just what we were looking for. Unfortunately, they only had one in stock and we needed three.
I KNOW, I KNOW...should have found another provider at that point.

However, they said they could get the other two phones from another store and we agreed to return the next day. Well, we ended up calling the store on Monday to let them know we would be unable to return there until today.

When we arrived it took them a few minutes to find the phones, and it rapidly went downhill from there. First, the sales clerk was obviously inexperienced when it came to processing the transfers and upgrading the plan. So imagine my surprise when the Manager of the RadioShack, after watching the clerk struggle at the computer for a few minutes, announced something to the effect that "I've got to get out of here. I've got tickets to a Yankees game and a free dinner with a Budweiser distributor and if I don't leave now I'm going to hit traffic" It was 2:45 p.m.!

So there we were watching the clerk trying to figure out how to get this done and losing confidence by the second. But, to his credit, he picked up the phone and called Cingular. The first point of contact was in Customer Care (I know this because the clerk had taken the wireless phone he was using and put it on speaker), the customer service rep told the clerk at least three times that he could not help him before finally offering to transfer the call to the proper department. Next thing you know, we're on hold for at least ten minutes.

Finally, the a rep in the appropriate department gets on the line and then the fun really started! First, the sales clerk informs me that I am not eligible for an upgrade to my phone for another month. When I asked the Cingular rep (still on speakerphone at this point) if there was anything we could do about that her response was to ask the sales clerk if we were on speaker, when he answered yes, she told him that this was not allowed and, after taking the line off speaker, she jumped all over him (loud enogh that you didn't need the speaker activated to hear her). The clerk asked her again about the upgrade for my line and she said wouldn't even discuss the possibility, instead she informed him taht in order to upgrade my plan, which would bring in three new customers, I was not only forfeiting my 3,200 Rollover minutes and ineligible to upgrade my phone until next month (3 NOV to be exact) but that I would also have to extend my contract for an additional 11 months. I KNOW, I KNOW...AT THAT POINT I SHOULD HAVE HEADED OFF TO FIND ANOTHER CARRIER. SHAME ON ME.

But, no, I decided to hold off on upgrading my phone until I was eligible thinking that if they don't wnat to sell phones than so be it. So the sales clerk and the Cingular rep start working through the process of transferring the two Verizon lines and, at some point, the Cingular rep requests my FULL social security number. So the clerk hands the phone to me.

So, now picture this:

I am talking on a wireless phone,

in a retail store in a shopping mall,

to someone I don't know,

who if they are who they represet themselves to be, has access to my account record,

and she asks me for my FULL social security number. Well, just as any self respecting senior executive with more than fifteen years of international security experience (including investigating identity theft and protecting conficdential information) would do, I refused. I told her that I would give her the last four numbers with which to verify my identity.

She abrubtly demanded, not asked, to speak with the RadioShack Sales Clerk. He then explained that in order to transfer the other Verizon accounts, which are not currently in my name or associated with my SSN, they would need my full social security number. When I refused yet again, he handed the phone back to me. If I wasn't so annoyed and frustrated by this point it would have been almost comical.

I explain to the Cingular rep that:

1) I have several forms of ID that I can show the clerk,

2) I will not disclose my full social security number given the fact that I am in a public place, on a wireless phone,

3) I am "30 seconds away from canceling this entire transaction and, when my account expires, taking my business to Verizon"

4) that I would like to speak with her supervisor to try and solve the problem


Her reply was to once again demand to speak with the clerk. Now, at this point I am thinking that all we need is the brightly painted VW and 34 Clowns and we would have the whole darned circus right there in the store.

So next, the clerk tells me that he can enter my FULL social security number on his system if I give it to him. I am fairly certain that, at that point, he could tell by the look on my face that I was not amused, or perhaps it was the manner in which I told him there was absolutely no way I was going to allow anyone to input my full social security number on a third party computer system to be transmitted over an unknown network that gave me away. Then he tells me that the Cingular Rep said "if you just want to open a whole new account instead of upgrading your existing one we won't need your social security number at all".

Needless to say, at that point, the transaction came to an abrupt halt.

So, after not one but three attempts to upgrade my plan, purchase four new phones and transfer two customers from Verizon and one from Nextel, I have seen the error of my ways. As soon as my plan expires, I will be finding a new provider. In the meantime, the rest of the family is going with another provider and Cingular can rest assured that I will use every last one of those 3,000+ Rollover minutes before my plan expires.

ALL BECAUSE A CINGULAR REP, DESPITE BEING TOLD OF THE CONSEQUENCES, WAS UNWILLING OR UNABLE TO EXERCISE GOOD JUDGEMENT AND ENGAGE A SUPERVISOR AT THE REQUEST OF A CUSTOMER.

I've spent enough time in the corporate world to know that this sort of ineptitude and customer disservice is rarely isolated and , more often than not, is indicative of broader management shortcomings, so perhaps this is as much a cautionary tale for shareholders as it is for customers.


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