Baby Bell to buy Ma Bell
SBC, the regional phone company headquartered in Texas, has announced a plan to acquire AT&T, in a stock swap worth $16 billion. The deal would put an end to AT&T's prolonged collapse, and follows recent sell-off of its cable TV assets (to Comcast) and its wireless phone assets (to Cingular, which is jointly owned by SBC and follow Baby bell BellSouth).
The move, if approved, will put an end to a cycle that was started when the US government broke up the Bell monopoly in 1984. The spun-off divisions are rapidly consolidating. This is just the latest in a long series of buyouts, with more (quite likely Sprint and MCI) on the way.
AT&T's last remaining assets are a dwindling set of home long-distance customers and a variety of accounts with major corporations. AT&T also owns a global IP network, a strong reason for its use by major multinational companies. It has also talked a lot about getting into technical services, putting them in competition with IBM, HP, Accenture, and many others.
SBC has over 50 million, customers, 60% stake in wireless carrier Cingular, and a growing number of broadband DSL customers.
How the mighty have fallen. AT&T once stood shoulder to shoulder with General Motors as the epitome of American business. SBC, once Southwest Bell, is rising to take its place, an honor it shares with rival Verizon. With a full set of offering (local, long distance, broadband, and cell technology), both of those two companies are ending up reclaiming the AT&T monopoly in the guise of a duopoly. Yet these two are threatened in turn by VOIP, Wi-Max, and other developments.
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