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AT&T, Sprint in Wireless Pact

AT&T will use Sprints CDMA network to sell wireless services.
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With the traditional telephone business hammered by mobile phones and the Internet,

AT&T

(T) - Get Report

unleashed a strategy Tuesday to further smudge the boundaries between all three.

The company outlined an alliance with

Sprint

under which AT&T would sell wireless services over its rival's existing CDMA network. The company billed its role as that of "mobile virtual network operator" where it handles billing, customer service and marketing functions while retaining the ability to carry long-distance and international calls over its own lines.

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The move is part of a larger plan to tie wireless services to traditional local and long-distance calling. In addition to the bundled-services packages that are now common in the industry, AT&T plans to offer handsets that use voice-over-Internet-protocol connections over the next 18 months.

"AT&T plans to take that experience to a new level by giving customers innovative ways to integrate wireless into all of their communication needs," it said in a release. "Residential, small business and enterprise customers can anticipate a wide array of choices -- whether as a casual talker who wants a mobile phone for safety or a road warrior whose business depends on it."

The companies will be allowed to compete "without restrictions" under the five-year agreement, while AT&T will be allowed to use existing customer channels and technology to provide directory assistance, customer support and billing. AT&T also touted its "ability to leverage Sprint's existing wireless data network and innovate on top of it with AT&T-developed content and ISP platforms, value-added voice services and virtual private networking services."

No financial terms were disclosed.

AT&T's former wireless unit,

AT&T Wireless

(AWE)

, was sold to Cingular earlier this month.