What phone company did AT&T merge with?
Under the name SBC Communications at the time, AT&T—which subsequently changed its name to AT&T Corporation—stated intentions to buy one of its primary competitors in 2005. Comprising $16 billion, it was among the biggest mergers in American corporate history. This recreated the many parts of the 1984 AT&T phone system that split in half.
The original AT&T Corp. has its beginnings in the 1876 phone invention of Alexander Graham Bell. The company developed into a huge monopolistic force running most of the phone service markets for the following one hundred years. This all changed in 1984 when an antitrust lawsuit divided what was known as "Ma Bell" into seven regional holding companies often referred to as the "Baby Bells."
Among the Baby Bell companies was Southwestern Bell, later renaming itself SBC Communications. SBC began acquiring new companies during the next two decades; in 1997 it purchased Pacific Telesis; in 1998 it purchased SNET; in 1999 it purchased Ameritech. After more than two decades of separation, SBC bought AT&T Internet Corp., and in 2005 associated AT&T identities and brands were merged under one company.
The deal was attractive to both sides for a few key reasons.
- Profitability dropped for AT&T Corp. from their long-distance phone company. More financial capability and influence were able to be brought about by the combination.
- The acquisition of AT&T Corp allowed SBC the necessary scale to pack services like local and long-distance telephony, internet, and digital TV.
SBC was very clear from the beginning about wanting AT&T as the brand of the combined company. SBC Communications opted to rename itself AT&T Inc., later in 2005, thereby clearly establishing AT&T as the industry leader.
Just one of the many mergers that took place in the telecom sector throughout the early 2000s was the AT&T and SBC one. While Cingular Wireless and Nextel were also integrating at this time, Verizon had already purchased several old GTE sites. BellSouth and AT&T joined in 2006, therefore augmenting the AT&T that people know today with even more strength.
With the advantages of improved national coverage and a new capacity to provide bundled services, they remain major actors in the present telecommunication and mobile networking landscape. The first event in AT&T's path to reconstruct the franchise for a lasting change in competitive advantage was the purchase of SBC Communications in 2005.
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