AT&T Aims to Become All Things to All Customers

[SOURCE: New York Times, AUTHOR: Ken Belson]
Is bigger necessarily better when it comes to running a telecommunications company? Apparently AT&T thinks so in announcing plans to buy BellSouth, the primary phone and broadband provider in the Southeast, for $67 billion. Yet AT&T's ambitions on so grand a scale have raised questions about whether its strategy of gobbling up rivals has reached a point of diminishing returns. The company justified the deal yesterday by saying that it expected the merger to save about $2 billion in annual costs by 2009. About 40 percent of the savings are to come from eliminating 10,000 jobs in the next three years. Much of the rest will reflect reduced advertising expenses and the economies of combining the networks of AT&T, BellSouth and the cellphone carrier Cingular Networks. Analysts are skeptical, though, about those projections because AT&T already has its hands full in merging the operations of its leading component, SBC Communications, and the old AT&T, long the namesake long-distance provider, a deal that was sealed last fall. Its wireless subsidiary, Cingular, is still working through a consolidation with AT&T Wireless, which it acquired in 2004. And now, the company's managers and engineers will be asked to add BellSouth's 21 million local lines, 3 million broadband subscribers and lineup of business customers to 50 million existing local phone lines and 7 million broadband customers, most of those until recently customers of SBC.
http://www.nytimes.com/2006/03/07/business/07phone.html
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