AT&T Wireless Services Inc. continues to roll out advanced devices and services despite an impending acquisition by Cingular Wireless L.L.C., which could be completed by the end of the year. AWS’ trend of new offerings could force Cingular to make some tough decisions about which services to keep if and when the acquisition is approved.
AWS’ latest service launch involved its Music Store offering, which allows wireless data customers to purchase digital music tracks from a library of 750,000 songs from their handset. The service, built with cooperation from Loudeye and Microsoft Corp., allows users to listen to 30-second song clips on select handsets. Subscribers can purchase songs for 99 cents or pay $10 for an entire album, which then can be retrieved from a personal computer.
The service builds upon AWS’ Music ID service, which lets customers identify songs or artists by holding their wireless handset up to a music source for 15 seconds and then receiving the artist and song information through a text message sent to their handset. Customers then can click on a link that will take them straight to the mMode Music Store to buy the song.
AWS also launched a trio of new Motorola Inc. quad-band GSM handsets, which adds to the number of devices compatible with the carrier’s international roaming service.
Even as AWS announced Feb. 17 that it would be acquired by Cingular, the company has been adamant it would continue to operate as an independent company until the deal is closed. “Until all the i’s are dotted and t’s are crossed, we are continuing to operate as an independent company,” AWS spokesman Ritch Blasi reiterated last week.
Indeed, AWS continues to offer innovative services at a time when some thought the carrier would back away from such moves. The carrier recently unveiled its Ogo mobile messaging device, launched and expanded its high-speed UMTS network and partnered to provide cellular service for cruise-ship passengers. AWS also has introduced aggressive rate plans that have helped the carrier turn around customer losses suffered earlier this year.
“A lot of what we have launched are good, revenue-generating products and services that can be used now and in the future,” Blasi added.
Analysts said they are not surprised by AWS’ continued rollout of new devices and services, noting the carrier had a number of initiatives in the pipeline prior to selling out to Cingular.
“You can’t stop people from doing their day jobs,” said Linda Barrabee, senior analyst of wireless and mobile services at the Yankee Group. “Regardless if they were going to be acquired, [AWS’] employees were going to move ahead with their mandates.”
Barrabee added that it would be interesting to see which products and services Cingular supports once the acquisition takes place.
A Cingular spokesman said the carrier can’t comment on which AWS initiatives Cingular would continue to support post-acquisition as it has not been able to look independently at AWS’ books due to government regulations. All interactions between the two companies have taken place in a “clean room” that is limited to non-partisan analysts and consultants.
Industry sources claim AWS’ network enhancements likely would be the most obvious item Cingular continues to support. Cingular will acquire a nationwide GSM/GPRS/EDGE network to support its own operations, as well as picking up AWS’ limited UMTS network, which covers six markets. Cingular has said it would test UMTS services this year in Atlanta and planned to deploy the technology onto its network beginning late next year.
The carriers also made some initial progress in integrating their networks through recent roaming agreements as well as plans to enable MMS interoperability between their customers.
The more challenging decisions for Cingular are likely to involve integrating AWS’ segment-specific devices and services. The Ogo device and accompanying unlimited messaging service is unique to AWS, and according to Barrabee, might not align with Cingular’s plans for messaging. In addition, AWS’ quasi-prepaid GoPhone offering, which analysts have noted has accounted for an increasingly growing portion of the carrier’s customer growth, could challenge Cingular’s more basic Keep In Contact prepaid service.
While AWS maintains that it has continued to operate as an independent company, the carrier made a number of deals to clean up its carrier affiliations, which are tied to approval of its acquisition by Cingular. Those deals included ending its affiliation and non-compete clauses with Triton PCS Holdings Inc. and Cincinnati Bell Wireless, as well as selling its 34-percent interest in Canadian wireless operator Rogers Wireless Communications Inc.
In the unlikely event that Cingular’s acquisition falls through, AWS would have to mend several of those fences if it wanted to continue to operate as an independent carrier.
Of course, odds are the deal will take place, leaving the task of trying to integrate two of the country’s three largest wireless carriers.
