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Pre-merger upgrades planned for Cingular and AT&T

By Vikas Bajaj
Seattle Times news services

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ATLANTA — Cingular Wireless and AT&T Wireless Services said yesterday they are redoubling efforts to extend coverage and improve service in the months leading up to the completion of their $41 billion merger.

At a news conference, Cingular executives said consumers could expect even bigger improvements once its takeover of the nation's third-largest cellular company is complete. They also played down the difficulty of integrating Redmond-based AT&T Wireless, a concern highlighted by many experts.

"We are going to have a much more robust, more reliable network with fewer dropped calls," said Ralph de la Vega, Cingular's chief operating officer.

Separately, a senior AT&T Wireless executive said several initiatives would markedly improve the company's newer GSM network, especially in cities where it operates in two wireless frequencies. He also said the company was intent on building high-speed data networks in four markets.

Officials from both companies said they would keep their distance from each other while antitrust and telecommunications regulators evaluate the deal.

Cingular filed documents with the Federal Communications Commission and the Justice Department last week.

The companies' comments came on the sidelines of the Cellular Telecommunications and Internet Association's Wireless 2004 show in Atlanta, which is the first big industry gathering since Cingular won the bidding for AT&T Wireless in February.

The deal and its ramifications for the wireless industry has been the subject of many conversations and much speculation at the annual conference.

Addressing a roomful of reporters and analysts at breakfast, de la Vega said the deal would benefit the industry by creating a company with cellular licenses covering most of the United States. The firms' overlapping networks of cellular towers and antennas would yield better coverage, he added.
 
AT&T Wireless is improving coverage by extending its GSM, or global system for mobile communications, network into the 850-megahertz band, which it has licenses for in many markets, said Rod Nelson, AT&T Wireless' chief technology officer. The company had previously operated the new network only in the 1900-MHz band.

The company is also allowing customers with GSM phones to automatically roam onto other companies' networks in their home cities at no extra charge. This could help users who run into dead spots with no AT&T Wireless coverage but a Cingular or T-Mobile USA tower.

While Nelson extolled his company's efforts, Cingular executives made a case for why the merger would survive antitrust scrutiny and wouldn't be as difficult to execute as some experts believe.

Addressing concerns that Cingular and AT&T Wireless are the biggest cellular providers in many major markets such as Dallas, de la Vega said regulators should evaluate the deal on a national basis because that's how most consumers buy service.

"There's going to be a very vibrant set of competitors," he said.

De la Vega said the company could live with regulatory demands that it divest assets in some markets where the two companies dominate the field.

Cingular also said folding AT&T Wireless into its operation, while significant, wouldn't hobble the company. It would be less difficult than Cingular's two-year effort to switch its network to GSM.

The integration is "a challenge not quite as daunting as the one we just pulled off," said Ed Reynolds, president of Cingular's network operations. Experts have said companies face a daunting task in combining their many corporate departments, billing systems and wireless networks — as many as seven by Cingular's own count.

Verizon Wireless, the nation's largest cellular company, said it's unconcerned that the deal will create a company larger than it.

"Our goal is not to go out and buy somebody else to become bigger than Cingular," said Richard Lynch, Verizon Wireless' chief technology officer. "We will let other people figure out whether we need to merge with anybody else."

He said Verizon intends to take advantage of the disruption the merger will create for Cingular and AT&T Wireless.

Vendors of telecommunications equipment said that even if the merger reduces the companies' spending at first, the deal is good for the industry.

"We actually look at it favorably," said David Murashige, vice president for strategic marketing at Nortel Networks' wireless division. "We think the combined entity will be more efficient."

U.S.-Europe breakthrough on text messaging claimed

AMSTERDAM — AT&T Wireless said yesterday its 22 million U.S. customers could send and receive short SMS text messages to over 263 million mobile-phone users in Europe.

The Redmond-based company said it was the biggest effort to date to open up the mobile-texting market between the two continents.

Germany's T-Mobile, which operates mobile networks in Europe and the U.S., already offers trans-Atlantic texting among its subscribers.

Two-thirds of British text-messaging users were under the mistaken impression that their SMS could reach the United States, a study financed by AT&T Wireless has found.

The company signed deals with 71 European operators in 25 European countries, reaching over 263 million European handset users, including most in Britain and Italy.

AT&T Wireless customers will pay 25 cents per trans-Atlantic message, compared with 10 cents for a national U.S. SMS.

Around 450 billion text messages were sent around the world last year, according to Finnish mobile phone and network maker Nokia, an increase of 50 percent over 2002.

The United States has been a few years behind Europe and other regions in adopting text messaging, but mobile-phone users can now send text messages across all networks there.

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