The next time you look at your ATT Wireless bill . . .
. . . it could have a Cingular logo on the top of it. Cingular just won a bidding war for AT&T Wireless, paying $15 per share or $41 billion. Read more details here.
By purchasing AT&T Wireless, Cingular has now become the biggest cellular carrier in the U.S., surpassing Verizon who formerly held that spot. Does this mean that more mergers are imminent? Maybe. Cingular, according to the article above, estimates $1 billion in savings in 2006 and $2 billion in annual savings starting in 2007.
If the economics were to work out similarly for other companies if they merged, it would be likely to see more mergers taking place. Looking at the networks, Cingular and AT&T Wireless both use the same kind of network -- GSM/GPRS, meaning that, in addition to operational synergies and savings, customers should benefit by an increased coverage area. Verizon and Sprint use the same kind of network -- CDMA, so there may be a benefit to those companies exploring financial and operational benefits. T-Mobile operates GSM just like the new Cingular/AT&T network, so maybe there will be plans for a merger there. Nextel operates on a proprietary IDEN network, which is not really compatible with with GSM or CDMA, however, were Nextel to merge with any of these companies, I would not be surprised if new Nextel hardware had the ability to hop between IDEN and GSM or CDMA networks.
It will be interesting to see what happens next.