31 Jan SBC merger with AT&T could open opportunities in Wisconsin
After SBC Communications’ Monday announcement that it plans to buy its former parent AT&T, rival communications companies are keeping their eyes open for new opportunities.
Drew Petersen, director of legislative affairs for TDS Telecom, said the merger between SBC and AT&T is a sign that SBC plans to become a global provider of communications rather than a regional one. TDS, which Petersen said tries to present itself as a Midwestern company, is keeping an eye out for any new markets—particularly working with small businesses—that will open up following the merger.
Petersen said similar opportunities were available when AT&T exited the Wisconsin communications market in July of 2004. When this happened, it left several customers in the public and private sectors that companies like TDS and SBC were able to take over.
“Any time a merger of companies of this size happens, it creates major marketplace openings,” Petersen said. “Wisconsin might not be strategic for the combined entity, but will remain so for us.”
Other communications firms do not find Wisconsin as a major turning point in the merger. Bill Kula, a spokesperson for Verizon’s western division, said that the company plans to adapt to SBC’s developments but has no plans to radically alter its business plans. He said that the merger will take time for SBC to finalize, and because both firms work in several separate communications areas it will also take time for any competition to develop.
Kuhn said Verizon plans to work on a national level and deal with established businesses, developing a fiber-optic network that will reach across 12 states. Since Wisconsin is only a small part of Verizon’s market, with 400,000 subscribers out of their total 55 million, it is not likely to play a major role in their competition with SBC.
“Wisconsin’s a relatively small state in terms of local phone lines,” Kula said. “For local phone businesses, this [merger] changes nothing whatsoever.”
SBC will purchase AT&T for $16 billion in cash and stock, with the deal expected to close in the first half of 2006. SBC chairman Ed Whitacre will remain chairman and executive officer of the business, while AT&T chairman David Dorman will stay on as president and member of the board of directors.
The deal has received some criticism from market analysts who think that $16 billion was too much for AT&T, which has had a steady decline of revenue and growth over the past few years. Additionally, the deal will have to move past regulatory and antitrust issues before it can be finalized.
According to Denise Koenig, an SBC spokesperson, the company does not expect any major obstacles to finalizing the deal with AT&T. “It ensures there is a future for a company that has existed for a hundred years …we believe regulators will look at that fact,” she said.