Cingular's pitch for ailing AT&T Wireless (AWE) doesn't look like the start of a bidding war.

Tuesday brought news that the wireless industry laggard is considering an all-cash offer from rival Cingular, a joint venture between

SBC

(SBC)

and

BellSouth

(BLS)

. Representatives of each company declined to comment, and details of the offer -- first reported in

USA Today

-- weren't available.

The news comes amid a furious telecom-industry rally that has stoked talk of a merger-and-acquisition boom. But industry analysts see little prospect of a bidding frenzy for AT&T Wireless. Instead, they expect Cingular to win AT&T Wireless in a deal that values its stock -- which has jumped some 30% in the last week amid steady deal talk -- at around $12 per share, or roughly $33 billion.

That's solidly above recent trading prices, but it's a far cry from the kind of premium a turbocharged market might typically demand. On Tuesday, AT&T Wireless rose 52 cents, or 5%, to $10.51.

Limit Orders

Obviously, AT&T Wireless shareholders would like to see a higher bid, but industry observers point to several factors that could limit the premium. While it has a strong presence in both the consumer and business markets, AT&T Wireless has been a laggard on nearly every front, with

slower growth, higher customer

defection rates and the worst service quality ranking of its group, according to recent surveys.

And despite rumors that other carriers like

Nextel

(NXTL)

and

Deutsche Telekom's

(DT) - Get Report

T-Mobile

were also interested in AT&T Wireless, analysts said a bidding war appears unlikely. Cingular's Bell parents have spent the past year lowering their debt levels, so they could be in a position to take on a massive acquisition, say analysts. That's less the case with other players, whose balance sheets have grown stronger over the past year but still aren't as robust as the big Bells.

A lack of eager, deep-pocketed buyers could thus depress the value of the network and subsequently cut into the price of the deal, say some observers.

Life During Wartime

That's not to say the news on Cingular's bid is all bad. On the synergy front, analysts cheer the potential marriage. The union of the Cingular, nation's No. 2 cell-phone service, and AT&T Wireless, the No. 3 carrier, would catapult past industry leader

Verizon Wireless

, which is a venture of New York telco

Verizon

(VZ) - Get Report

and British giant

Vodafone

(VOD) - Get Report

. The combined Cingular and AT&T Wireless would have more than 45 million subscribers, while Verizon would have more than 36 million.

The merger would also winnow the number of national players to five from six.

Industry experts say they'd welcome a long-awaited merger because it would presumably help to reduce competitive pressure and ease the so-called churn rate, i.e., the hopping by customers from one company to another. Recent number portability rules have already worsened an existing industrywide customer-retention problem.

Whimsy

With its poor network quality and

plague of software glitches, AT&T Wireless is seen by many as the least likely to succeed in a market increasingly driven by customer whimsy. Analysts say they expect AT&T Wireless' churn rate to jump to 3% monthly when the company reports earnings next week.

"At this rate, AT&T needs to add 10 subscribers for every one they keep," says one Wall Street analyst, who asked not to be identified. AT&T Wireless' high customer acquisition costs have hampered the company's efforts to deliver the improved margins it has promised the Street.

Meanwhile, outfits like Nextel, with a cultish following for its two-way radio features, have enjoyed remarkable customer loyalty, the highest average prices and more than $1 billion in free cash flow last year.

The match would work in terms of tech as well. Both Cingular and AT&T Wireless use time division multiple access, or TDMA, network technology, and both are upgrading to the global systems for mobile, or GSM, platform. Rivals like Verizon and

Sprint PCS

(PCS)

use code division multiple access, or CDMA, gear.

A complication to the potential Cingular-AT&T Wireless hookup is that antitrust rules require that the companies divest themselves of any significant overlapping network properties. By analysts' estimates, that's somewhere between 10% and 20% of the combined companies' footprint.

Still, some see a need for action. AT&T Wireless directors were scheduled to meet early this week to set a course for the underperforming telco. Given the company's performance recently and an anticipated lackluster fourth-quarter report, one analysts said, "I think finally the board's patience has to be worn thin."