ATT&T Wireless, VoiceStream in preliminary discussions;Cellphone firms talking merger

So DT would give up Voicestream? If VS was independant before DT bought them, aren't they just moving back to square 1 in a sense. Sure, a tie-up with AT&T lets them grow but I would think being under the DT wing would offer more future opportunities.
Unfortunately, it seems as if DT got caught in trying to keep up with Vodaphone and was so desperate that they screwed themselves hard by overpaying for VS. If they could hold out keeping it, I think it really does do them good as an avenue into the U.S. market.

Matt

 

Here are some of the news items I found on the possible merger. Read all about it below.

CNN.com europe - VoiceStream in U.S. merger talks

USA Today - VoiceStream-ATT Wireless talking merger?

MSNBC.com - Cellphone firms talking merger

 

DT CEO Ron Sommer wants to hold out; but the 65 billion in debt may force him to make a move. It _could_ be a good combination. I like the fact that VS would essentially be acquiring AT&T by remaining the dominant shareholder - VS is much better positioned for 3G. AT&T also has a strong brand name. I'd like to give T-Mobile a try though first.

 

It seems this is all over the net today, big news in the Wireless business.


VoiceStream, AT&T Wireless to hook up?


By Reuters
July 10, 2002, 5:00 AM PT


VoiceStream Wireless is in talks to merge with AT&T Wireless Services, a move that would create the second largest cellular phone company in the United States, a Wednesday report said.
Citing people close to the talks, The Wall Street Journal said that any deal could be valued at $10 billion although it emphasized that talks are "very preliminary" and may not result in any merger.

Both AT&T Wireless and VoiceStream, controlled by Deutsche Telekom, have held talks with a number of companies in recent months, according to the report, with no agreement reached.



Deutsche Telekom declined to comment on the report.

Faced with high marketing costs, large customer turnover, lack of pricing power and high costs of upgrading to higher-speed networks, wireless telephone companies have been under pressure to consolidate in recent months. VoiceStream is the smallest wireless company in the United States; AT&T Wireless is No. 3.

People close to the talks say executives from VoiceStream and AT&T Wireless have been holding discussions about a deal that would combine the companies and make VoiceStream the dominant shareholder, the paper said.

A deal between VoiceStream and AT&T Wireless would create the No. 2 wireless company with 25 million subscribers--4.4 million short of the biggest player in the industry, Verizon Wireless, which is a joint venture of Verizon Communications and Vodafone.


VoiceStream, AT&T Wireless to hook up?

 

By the way ILUVSOCAL you might want to take that extra T out of your subject thread

 

Coffee, T or me?

We could call the new company AT&T-Mobile

 

Yeah I wonder if the merged company will still migrate to the T-Mobile brand?

If not, how about "AT&T-Stream"?

I wonder if AT&T will scrap their m-life campaign to T-life?

 

maybe 'deb-T-Life' ?

 

It definitely would create a very formidable GSM presence in the US with the new combined company being the #2 carrier, right on the heels of Verizon and #3 being Cingular. The GSM expansion via Voicestream and AT&T together could be interesting...they could really help to leverage each other.

Obviously, Voicestream had no need to consider 850mhz GSM but will now if they take on AT&T. Moreover, Voicestream will then need to consider the TDMA/Analog/GSM issue and possibly GAIT technology. A true nationwide Multi-band/GAIT plan that can take advantage of the combined Voicestream/AT&T GSM/TDMA/Analog network would make for one very appealling plan -- especially if AT&T can adopt Voicestream's appealling and attractive nationwide family and regional rate plans.

Users who crave for cool GSM phones would benefit too as they wouldn't have to worry as much about which carrier up & coming cool GSM phones will land with. This *could* also attract some even more formidable phone prices with the combined customer base and thus market leverage.

*** Hey, here comes Voicestream's new slogan -- "Get More mlife!"

 

that is what most people would want.......the better rates of voicestream to remain with the expanded coverage areas of at&t......at&t's prices are kind of high........surely they would not adopt the voicestream plans exactly but would increase them slightly at the least......but this would be offset by the additionaly gained coverage.....and m-life.....with Ntt docomo's stake in at&t roaming in the asian market should be at a low price and DT can keep giving great roaming rates in europe......thus making a very formidable international presence for the upscale business travelling market....a good one to have a corner on......high revenue etc etc etc

 

If I understood correctly, in the MSNBC article it says that both AT&T Wireless and Voicestream are controlled by Deutsche Telekom. Is this correct? The way they worded that sentence is poor and it is ambiguous in my understanding.

Also, they said that VS would be the dominant shareholder. It looks to me that we may see the AT&T name dissapear if the merge goes through. One reason for these talks taking place is that both AT&T and Voicestream are working on separate GSM networks and it will save them money if they merge and work on a single GSM network instead. If they do merge, it will definitely bring VS customers more options and of course, expanded coverage. Now, how will this affect Cingular? Will they continue partnership with VS and in the end all share the same GSM network?

 

Ok, nevermind, I read the USAToday article and it is written clearer than MSNBC. Only VS is controlled by DT.

 

They will probably keep the AT&T name as it is the stronger brand name worldwide (compared to VS). They can't keep T-Mobile since that is owned by DT, and wouldn't be part of the deal.

They will still switch to T-mobile over the next few months. IF this happens, it won't close until next summer at the earliest.

 

Hey this is weird. I was just talking about I would rather see a AT&T/Voicestream merger than a Cingular/Voicestream merger for the past few days in some different forums and threads.

I'm glad that Voicestream will be the dominant, because I like the way that they do business and run their company. The T-Mobile name should carry to all of the GSM, and allow the AT&T Wireless name to stay on the TDMA until it fades away, since Voicestream thus has nothing to do with TDMA in any shape, form, or fashion. Plus, the name change from AT&T to T-Mobile would be more of a chance for AT&T Wireless to further their spin-off from AT&T corp, and still without loosing a brand name (in other words, still having a know name, not going from a very known name to a name that noone has ever herad of). Man, this will probably definitely put Suncom (Triton) into independancy, but this seems to be what they want. I hope this AT&T/Voicestream merger goes through, but I would rather see a joint-merger of AT&T/Voicestream/Deautsch Telecom (DT). This would keep Voicestream (AT&T also) under the wing of a major, major, world's biggest wireless network provider, DT. Well I believe Vodafone is bigger, but that is only because of their stake in Verizon, therefore they offer GSM and CDMA, thus two totally different type of technology which are not interchangeable. CDMA customers cannot roam internationally on Vodafone's GSM network, and vise-versa.

Wow if this happens, what will make of Cingular?

 

If a VoiceStream/AT&T merger happened it would knock Cingular down a notch to the 3rd largest wireless provider in the US. Personally I am all for a AT&T/VoiceStream merger it could have some definate benefits especially on the coverage side of things.

 

If it does go through then they may do as Bell Atlantic/GTE (Verizon), and SBC/BellSouth (Cingular) and just come up with a new name. The others did it that way, so why could they not do the same?

 

Although incorporating TDMA and analog into VS network will greatly benefit customers as far as coverage, we have the downside to the merger which I believe it will be bad for VS customers who are used to being treated very professionally as VS reps do. If this happens, AT&T will take over and unfortunately Voicestream's business ethics and the excellent way they treat their customers will vanish just as anything that AT&T touches. Just because VS would be the dominant shareholder doesn't mean they will keep their name. Unfortunately, the AT&T name sells more and they have a bigger sales force along with more employees and most likely AT&T's incompetitive business practices are more likely to prevail.
We can forget about DT/VS/AT&T merge because the reason the proposition was brought to the table is that DT is better off without VS for financial reasons. Plus AT&T will have the benefit of a more mature GSM network than theirs so they won't have the expense of building overlapping GSM coverage because they will take VS's.

What will this make of Cingular? Well, I believe they will just be a partner with AT&T just like they have been all along.

This merge will only benefit AT&T and no one else IMO.

 

AT&T does NOT have poor customer service. I've heard many happy users from them about how good there customer service is. Let's not forgot AT&T Wireless is one of highest rated wireless companies in the US and in last years JD Power Survery they won more awards then any other carrier.

 

TNDan, I agree with you. I don't know where these blanket statements come from about AT&T's customer service? In another thread, one user disagreed and said that they found AT&T to have better Customer Service than Voicestream. AT&T Wireless, in the past several years has had a very good reputation for customer service. Again, the NY region for AT&T does have somewhat of a weak reputation for their CS reps. Other than that, do you think Sprint and Cingular are models to follow? LOL - hardly.

Hopefully, Voicestream will learn from AT&T's fair practice of offering a real trial period (30 days) instead of a ridiculous 72 hours.

 

Didn't AT&T do something last year with NTT DoCoMo? I seem to remember the Japanese taking a stake which is weird since NTT's tech. is a form of CDMA.

Matt

 

NTT is rolling out a slightly modified version og w-CDMA, which is 3G. It's out know. I believe NTT ows 16% of AWE.

 

From alt.cellular.voicestream: (Again, the merged markets could make for one very formidable GSM footprint down the road -- which is one of the ultimate goals AND implementing new technologies is very expensive)

"I just wanted to post a little test I did here in Phoenix with Verizon
and Voicestream. I purchased a Voicestream prepay phone to see how the
coverage here in Phoenix is and this was my first experience with GSM in
the US and boy was I bummed. The features are great sound was good when
in good signal area but in town coverage here is not great at all
compared to Verizon. At my office both were about the same (our office
has big windows and is on the second floor)at home 1 to 2 bars and
sometime choppy with VS, Verizon full signal no problems. My route
driving to work lots of areas where VS was choppy and VZ solid. The
final test was at grocery stores etc the VS phone lost signal fast and
VZ lost signal but not as bad and calls still could be made. I know this
is a very general test but I had high hopes at least here in town. Oh
and the final test was test calls from different areas work, driving
home (used hands free) and my wife said Vs was was kinda muffled and VZ
sound a lot clearer.

When I had ATT they were even way better than this
and both ATT and VS are 1900mhz pcs carriers here. Anyway at least here
in Phoenix I would not go with VS. Yes the GSM phones are cool but I
would rather stick with my old av9000 or another new VZ phone they may
not be as cool but at least they work. Just my 2cents."

 

http://www.newscuts.com/cgi-bin/read.cgi?http://c.moreover.com/click/here.pl?t42355265

VoiceStream U.S. deal 'unlikely'
July 11, 2002 Posted: 1116 GMT

LONDON, England (CNN) -- Sooner or later, as customer growth slows, U.S. telecom companies will begin pairing up. But don't expect to hear wedding bells for AT&T Wireless and VoiceStream.

Despite reports to the contrary, America's No. 3 and No. 6 wireless telephone companies are unlikely to tie the knot, analysts say.

The Wall Street Journal said on Wednesday VoiceStream -- owned by Germany's Deutsche Telekom -- and Redmond, Washington-based AT&T Wireless were discussing a merger.

The possible deal -- which analysts estimate could be worth $10 billion -- would create the second biggest U.S. wireless company behind Verizon Wireless, which is owned by Verizon Communications and Britain's Vodafone Group.

Cingular Wireless, a joint venture of BellSouth Corp. and SBC Communications, would drop to third placed.

Neither AT&T Wireless nor Deutsche Telekom would comment on the report.

But analysts have had lots to say, most of it negative. While they would not be surprised to see VoiceStream up for sale -- given Deutsche Telekom's heavy debt load -- they doubt AT&T would be the buyer.

"We believe that this combination would make very little sense for AT&T Wireless," investment bank Bear Stearns said in a research note.

"While we believe strongly that there will be consolidation in the industry, we find it more likely that Cingular would offer a competing big for VoiceStream before any deal with AT&T Wireless was complete."

VoiceStream, AT&T and Cingular have been often mentioned as likely merger partners because they all operate on the same wireless standard, GSM (for Global System for Mobile communication).

"The primary attributes of VoiceStream is the amount of spectrum they hold," Todd Bernier, wireless analyst with Morningstar, told Reuters, adding that over half of VoiceStream's spectrum or airwave rights remain unused.

"They're spectrum rich and customer poor, so if you align them with someone else, the obvious fit would be someone who is spectrum poor and customer rich, and that's Cingular."

Bernier said AT&T Wireless already has enough spectrum to operate for at least the next several years and VoiceStream's network would overlap with its own.

Beyond the AT&T and VoiceStream situation, however, mergers within the telecom industry are inevitable.

"Pricing is terrible in this industry. Pricing doesn't get better until there is consolidation. The sooner, the better," Ken Turek, co-manger of the Northern Global Communications fund, said.

Indeed, companies throughout the sector are struggling because there are too many companies chasing too little business.

Long distance and wireless carriers have to keep slashing rates to remain competitive. And that hurts their profit margins. In addition, many upstart phone companies failed to make major inroads against the long distance giants and their smaller rivals and have gone bankrupt.

Because of the poor fundamentals, the surviving carriers have been cutting back on capital spending, which has caused major damage in the telecom equipment sector.

Consolidation among wireless companies probably will happen first simply because that is where there is the most overcapacity.

"The U.S. wireless market is peculiar because it has six national wireless providers and six is probably too many. Most other countries have just a couple," said Mark Schultz, portfolio manager with M&T Asset Management, which runs the Vision family of funds.

Aside from Cingular, AT&T and VoiceStream, there also has been speculation that some combination involving Sprint PCS, Verizon and Nextel could take place since they operate on a different competing standard known as CDMA (Code Division Multiple Access).

In the long distance area, WorldCom's woes could force it to sell off assets piecemeal, says Patrick Comack, an analyst with Guzman & Co.

But Comack says he doubts that the other two long-distance companies -- AT&T and Sprint -- will be sold in the near future unless they run into similar problems as WorldCom.

The reason? While the many smaller companies covet the corporate customers that WorldCom, AT&T, Sprint have, none are likely to want to acquire their networks or have to absorb their debt.

"Consolidation will happen not necessarily through company acquisitions but through the purchase of assets in bankruptcy court," Comack says.

But some analysts say it is too risky for investors to try and pick companies that might get taken over.

Even if there is a wave of mergers, the stock prices of the likely buyers and sellers are much lower than they were two years ago, or even last year. And deals being done out of necessity are not likely to reward shareholders.

Just look at VoiceStream for example. Deutsche Telekom acquired VoiceStream in 2000 for about $31 billion. But if estimaes are correct the value of a possible AT&T-VoiceStream merger would be just $10 billion.

--CNN/Money contributed to this article

 

I personally feel that Deutsche Telecom will sell voicestream to either Cingular or AT&T, because of financial problems. From that point on Cingular and AT&T will merge to make a solid GSM market in the U.S. This seems the most logical given the current situation.

 

it depends how much they get for them......remember DT paid something like 20 billion for VS when they bought them.

 

<< I personally feel that Deutsche Telecom will sell voicestream to either Cingular or AT&T, because of financial problems. From that point on Cingular and AT&T will merge to make a solid GSM market in the U.S. This seems the most logical given the current situation. >>



That will most likely never happen, that would create a monopoly in the US in the wireless industry and the FCC is unlikely to approve such a deal.

 

Man i hope att and VS dont merge.

VS isnt innovative at all and at&t wireless is and plus i dont understand why at&T would get the short end of the deal????

If att and vs do merge ill sell all 500 shares of my stock and cancel all of my accounts with at&t

I mean its sad that one of the only first wireless companies left would take a back seat to some new kid on the block.

Long live at&t wireless...die voicestream die

 

AT&T Wireless is no longer part of AT&T, so why would you take it out on AT&T what a wireless company with the same name did?