Battle For AT&T Wireless


Amazing as it may seem, but the company which is losing customers by boatloads, thanks to number portability, i.e. AT&T Wireless is in middle of a massive bidding war. Following yesterday’s news that Cingular and AT&T Wireless are contemplating a merger, The Wall Street Journal is reporting that now NTT DoCoMo and Nextel have made overtures to the Ma Bell without wings. NTT owns about 17 percent of AT&T Wireless. Even Vodafone is contemplating making a bid. Predictably, none of the parties concerned were saying anything.

Vodafone and NTT could buy AT&T Wireless and get an instant mega footprint in the highly lucrative and still growing US wireless market. In addition AT&T Wireless has tons of small investments across the globe which might help these giants fill out some holes in their wireless networks.Why Nextel would make a bid, given it uses a different technology is a bit of a surprise. But it would be sweet vindication for Craig McCaw who sold McCaw Cellular to AT&T almost a decade ago and helped form AT&T Wireless. It could all be back in McCaw’s paw!

While Wall Street Journal story is short on details, Seattle PI reports that, AT&T Wireless has hired Merrill Lynch as an adviser. AT&T Wireless is the third largest US carrier and is said to be worth about $27 billion, but could easily fetch more. AT&T Wireless if it gets taken out is going to get one hefty premium. Yesterday AT&T shares rose nearly 17%. Ironically all this bustle comes on a day when The New York Times is reporting that customers are really unhappy with AT&T service.

The hustle bustle reminds me of another big telecom merger of the 1990s: MCI. If you remember, MCI was being wooed by WorldCon and others such as GTE and British Telecom. MCI was acquired by Bernie Ebbers’ WorldCon, but for a highly inflated price. The only real winners of that deal were Bernie, Grubby and the Investment bankers. This deal is no different.

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