WASHINGTON-SBC Communications Inc. President Edward Whitacre today said he opposes having to divest any wireless assets as a condition of winning government approval of the proposed $41 billion merger between Cingular Wireless L.LC. and AT&T Wireless Services Inc. and conceded there is a risk of losing tens of thousands of customers to mobile-phone rivals as a result of the upheaval from the transaction.
“I don’t think we should have to divest anything,” said Whitacre in an interview with Bloomberg TV.
Whitacre, whose SBC owns 60 percent of Cingular Wireless, would not say whether he would challenge any wireless divestitures required by the Justice Department and the Federal Communications Commission. BellSouth Corp. holds a 40-percent stake in Cingular.
The Justice Department and FCC are expected shortly to approve the combination of the No. 2 and No. 3 mobile-phone operators, but the agencies could very well direct the wireless operators to sell licenses in several major markets where they control a significant amount of spectrum.
Whitacre disputed that a combined Cingular-AT&T Wireless would have too much market power in markets such as Dallas, Atlanta, San Antonio, San Francisco and Miami.
“I don’t think so. There are five, six major competitors in all those areas now-big companies, not small companies, companies as large or larger than Cingular,” said Whitacre.
Whitacre did not say what his company would do if ordered to sell wireless holdings to win approval of the deal.
“I’m not privy to the Justice Department or FCC orders, so I don’t know what it says,” said Whitacre. “They don’t show us that … So, I guess we’ll just have to see what the deal is and then make a decision.”
Whitacre said he has a detailed strategy for combining the two wireless companies, including integrating towers, spectrum, retail stores, workforce and management. “It will be quite a task,” he said. Whitacre would not say whether there will be layoffs.
The SBC chief executive officer acknowledged that Verizon Wireless is the best carrier in the business right now, but played down the potential loss of customers to the No.1. mobile-phone company due to the chaos of the merger itself. He said tens of thousands-but not millions-of customers could be lost to other mobile-phone competitors.
