On February 17, 2004 an announcement was made. Cingular Wireless is to purchase AT&T Wireless creating the largest wireless carrier in the United States with over 46 million customers and annual revenues of $32 billion.
The Facts.
First a little background on each company. On October 5th, 2000 Cingular was created by combining two of the strongest regional wireless companies in the United States. Atlanta, Washington based Cingular Wireless, a joint venture between SBC Communications (60%) and BellSouth (40%) serves more than 24 million voice and data customers across the United States. Cingular's annual revenue for 2003 was $14.7 billion and is currently the second largest wireless company in the United States with more than 35,000 employees.
In 1994, AT&T entered the wireless business by acquiring McCaw Communications for $11.5 billion. AT&T spun off its wireless unit to shareholders in 2001, to become a separate publicly traded company thereby increasing its ability to raise capital. AT&T Wireless, based in Redmond, Oregon, is currently the 3rd largest wireless provider with 31,000 employees, 21 million customers and annual revenue in 2003 of $15.7 billion.
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AT&T Wireless and Cingular have worked together in the past. In 2002 the two companies joined forces and split the cost down the middle of building out a next-generation GSM (Global System for Mobile communications) and GPRS (General Packet Radio Service)-based network which once completed provided coverage along the major interstate highways in Arizona, Colorado, Kansas, Minnesota, New Mexico, Nebraska, Oklahoma, Texas, and Utah which were previously large "dead zones" with absolutely no coverage by any wireless provider.
AT&T Wireless has struggled recently. Late last year, it couldn't add new subscribers because of a glitch in a new software system designed to improve customer service. The company also has acknowledged that it lost more customers than it gained under new federal rules that took effect in late November allowing cell phone users to change carriers without losing their phone numbers.
