AT&T's New Route to Wireless

After the Cingular deal was announced, AT&T negotiated to reclaim the AT&T wireless name. If it chooses, AT&T can start selling wireless services under the AT&T Wireless brand as early as April.

For Sprint, wireless wholesale was a good opportunity to bring in more sales without a lot of effort. Wholesale revenue from resellers like Virgin Mobile and Qwest (Q Quote) represent about a quarter of all wireless sales. And the MVNO deal with AT&T makes sense from a network-capacity sense: Business-hour calling traffic fills a gap left by Sprint's largely consumer-oriented traffic, the bulk of which tends to fall outside business hours.

Now that Sprint appears to be closing in on a merger with Nextel, though, AT&T's presence could be a nuisance. Sprint and AT&T will likely be trying to sell the same bundle of services to the same group of customers.

The AT&T rep declined to speculate on Sprint-Nextel merger implications, but added that the company was happy with its MVNO arrangement with Sprint.

"CIOs want to buy wireless from their big vendors," says Marty Hyman an independent telecom strategist. The net effect, says Hyman, will be to bring down costs and possibly create a "wireless price war."