With the blessing of its parent companies SBC Communications Inc. and BellSouth Corp., Cingular Wireless L.L.C. is reportedly set to acquire one of its competitors as early as next year, according to a Business Week report.
The report cited unnamed company officials who said the deal would be substantial and could help the current second-largest nationwide operator with more than 23 million subscribers take over the top spot currently held by Verizon Wireless, which currently serves more than 36 million customers.
“What is Cingular going to do? Bet on a Texas-size acquisition,” Business Week reported. “The two parent companies have discussed the prospect of a deal sometime in mid-2004.”
Adding credibility to the rumor was SBC Communications Inc. Chief Executive Officer Edward Whiteacre, who was quoted in the story as saying he would like to be a bigger player in the wireless space and that something could happen “over the next number of months.”
Merger rumors have been circulating for years concerning the nation’s three GSM-based carriers-Cingular, AT&T Wireless Services Inc. and T-Mobile USA Inc., with many analysts noting a deal between two if not all three would help alleviate competitive pressure in the market.
T-Mobile USA was often regarded as the most likely to be acquired due to its smallest player position, but recent comments by its parent company Deutsche Telekom AG and strong quarterly performance has quelled that possibility. The most recent industry buzz has Cingular acquiring AT&T Wireless, which would result in a strong nationwide presence with both cellular and PCS licenses serving more than 40 million subscribers.
