BellSouth Likes to Go it Alone

[SOURCE: USAToday, AUTHOR: Leslie Cauley]
BellSouth and SBC together own Cingular, the largest cell phone carrier in the US. Last winter, SBC approached BellSouth about merging the two companies and BellSouth countered with an offer to merge the assets of BellSouth and SBC to create three separately traded companies -- a traditional phone company, representing the local and long-distance assets; a wireless business; and Yellow Pages. SBC walked away from the proposal and, instead, focused on the purchase of AT&T. One little-discussed aspect of the SBC-AT&T deal is its impact on Cingular. Once the AT&T merger closes, BellSouth will be in the unenviable position of having to compete against its wireless partner. SBC -- which intends to rename itself AT&T -- plans to storm BellSouth's Southeastern territory soon after the merger. Verizon-MCI has a similar plan. But BellSouth's larger problem, analysts say, is its think-small strategy. Blair Levin, of Legg Mason Wood Walker, says he wouldn't be surprised to see BellSouth get picked off -- probably by SBC -- soon after the AT&T deal closes.
http://www.usatoday.com/printedition/money/20051101/1b_bellsouthcov01.art.htm