The company called
will soon vanish, but its name will live on thanks to former parent Ma Bell.
struck a deal Monday to reclaim the valuable brand name from a struggling wireless company due to be gobbled up by year-end by a deep-pocketed competitor.
The deal comes as the cell-phone industry landscape is about to be radically remade by
pending purchase of AT&T Wireless. The companies are due to merge by the end of the year in a $41 billion deal that would create the nation's biggest mobile-phone service provider, supplanting current No. 1
Cingular, a wireless venture of
, says it will use its own brand following its acquisition of AT&T Wireless. Cingular will drop the AT&T brand after a six-month transition period.
AT&T is eager to take back the AT&T Wireless name because the cell-phone industry continues to produce the rapid growth that has eluded AT&T elsewhere.
And in what appears to be a warming of relations between telco titans, Cingular extended its service agreement with AT&T and committed to buy up to $100 million worth of long distance and other communications services from the New Jersey shop. The deal extends an earlier agreement between AT&T and AT&T Wireless.
AT&T says it plans to resell wireless services and is expected to do so under the AT&T Wireless brand. AT&T has already lined up
as one of its wireless service wholesalers. AT&T is expected to seek similar wholesale partnerships with other telcos, including Cingular.
Earlier Monday, Cingular parent SBC filed to sell up to $15.5 billion of stock and debt to help fund its share of the AT&T Wireless deal.The company had said last month it would sell $8 billion to $10 billion in debt to fund its portion of the $41 billion purchase. BellSouth has been selling off Latin American assets to help raise its share of the acquisiton war chest.
The AT&T move comes as the company struggles to regain its edge in the fiercely competitive telecom industry. AT&T recently said it would pull back from the sharply declining consumer phone business following a setback on the pricing front. That move came just months after the company lost its spot in the prestigious
Dow Jones Industrial Average
Meanwhile, AT&T Wireless moved to sell out to Cingular after a series of operational and customer service debacles sent customers fleeing in droves, punishing the company's financial performance.
AT&T spun AT&T Wireless off to shareholders in 2000 amid a boom in wireless service stocks. In mid-2001, AT&T Wireless became an independent business with no formal ties to AT&T through a spinoff of the rest of AT&T's holdings.
On Monday, AT&T shares closed up 18 cents, or 1%, at $14.48. AT&T Wireless rose a penny to close at $14.44.