AWEFul might be good


Looks like AT&T Wireless is bleeding customers left right and center. It is not such a bad thing for those stuck with the service, for it means fewer people on the network and that means better network quality. AT&T has always had a good network, its only problem is that it had too many customers. On the flip side, there are rumors that the recent exodus of customers might force Cingular to call off the merger. I don’t think so, and Business Week Online does a great job of explaining why the deal will go through.

bq. At heart, the merger to create the largest wireless-service provider in the U.S. has little to do with the financial performance of AT&T Wireless. Cingular — and especially its parents, Baby Bells SBC Communications (SBC ) and BellSouth (BLS ) — covet AT&T Wireless for its networks, wireless spectrum, and coverage. They need it so badly that the deal’s price, estimated at $41 billion, is unlikely to be renegotiated, despite recent speculation on the Street, says Michael Mahoney, a senior portfolio manager for the EGM Capital hedge funds in San Francisco.

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