expects to vault to the head of the cell phone service industry this month with final clearance for its acquisition of
, executives said Wednesday.
Ed Whitacre, chief at San Antonio-based Baby Bell
, and Duane Ackerman, CEO of Atlanta-based telco
, told investors at the Goldman Sachs Communicopia conference in New York that they expect to receive Federal Communications Commission clearance on the deal by the end of October.
Whitacre also shrugged off the consolidation talk roiling the industry this week amid increasing tumult at struggling giants
. Whitacre said that while SBC wouldn't rule out a deal with any industry player if the price were right, "that's not in our plan."
Wall Streeters expect AT&T to soon unveil another round of job cuts, possibly including a change at the top. Speculation only increased this week when Ma Bell Chief Dave Dorman canceled his appearance at the Goldman conference.
Cingular, a joint venture of SBC and BellSouth, agreed this winter to pay $41 billion in cash to take control of Redmond, Wash.-based AT&T Wireless. AT&T Wireless was once a hot property in the U.S. wireless business, but the company frittered away its advantage with poor performance in technology and customer service. It put itself on the block after customer defections hit a record level in late 2003.
Whitacre told the Goldman Sachs conference that Cingular expects to have to sell some overlapping network assets acquired in the AT&T deal, but it doesn't expect to make many divestitures. The most likely area for divestitures is in wireless antennas, observers have said; AT&T Wireless has some antennas in the same cities as Cingular.
Whitacre also said that SBC, which owns 60% of Cingular, expects the integration of the two wireless properties to proceed "faster than people imagine" once the government signs off on the deal.
Completion of the agreement will vault Cingular past
into the top spot among U.S. wireless service providers in terms of subscribers. Even so, it will be a while before Cingular can match Verizon's robust financial and operational performance. Verizon has boasted a low rate of so-called churn, or monthly customer defections, in the range of 1.7% to 2% recently. Numbers at AT&T Wireless have at times reached nearly twice as high, and execs said Wednesday they expected churn problems to resume for a few months before stabilizing as integration problems are worked out.
Telecom shares were narrowly mixed on a quiet market day Wednesday. SBC was down 3 cents at $26.85, BellSouth was up a penny at $28.49, Verizon was up 9 cents at $40.88 and AT&T Wireless was flat at $14.78, putting it just shy of its $15-a-share buyout price.