Case Code
BSTA132 Case Length 17 Pages Period
- Organization - Pub Date 2005 Teaching Note Not Available Countries - Industry
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Issues
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"Today's agreement is a huge step forward in our efforts to build a company
that will lead an American communications revolution in the 21st century,"
- Edward E. Whitacre Jr., SBC chairman and CEO
Introduction
On January 31, 2005, SBC Communications (SBC) and AT&T announced they were
merging to create a premier communications company with unmatched global reach.
The transaction sought to combine AT&T's global systems capabilities, business
and government customers, and fast-growing Internet protocol (IP)-based business
with SBC's local exchange, broadband and wireless solutions.
The combined entity believed that it had the assets, the resources and skill
sets to innovate and deliver advanced, integrated IP-based wireline and wireless
communications services to customers across the world.
Since AT&T's break up in 1984, the market had been divided into local and
long-distance phone sectors. The merger between SBC and AT&T looked all set to
dismantle the telecom industry structure and trigger-off further consolidation
in the American telecom industry.
AT&T and SBC believed that the merger would create a fully integrated
telecommunications player, a company able to offer a variety of telephony
services to households and businesses worldwide.
Meanwhile, some analysts expressed their concerns about the merger. SBC was a
local-access business in the US, where it operated as a local service provider,
while AT&T was a long-distance business, with extensive local coverage outside
SBC's local area.
This case study was
compiled from published sources, and is intended to be used as a basis for
class discussion. It is not intended to illustrate either effective or
ineffective handling of a management situation. Nor is it a primary
information source.
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