The Merger of Cingular Wireless into AT&T

During this past month, two of the biggest cell phone providers merged together, creating the biggest cell phone carrier in the country. Previously, that distinction had belonged to Verizon Wireless. The merger of Cingular into AT&T has had strong ramifications throughout the industry. When the merger was announced stock prices in AT&T rose while Verizon stayed the same. However, as for other cell phone providers, their stocks went down tremendously. It may be as technical analysts predict that there will only be two remaining cell phone companies left as the smaller companies for cell phones go out of business. There is still the issue of Apple Inc. and its iphone which will attract plenty of customers. However, for the majority of Americans, they cannot afford such a pricey phone and most people will probably stick to a basic cell phone that costs much less.

Both AT&T and Cingular Wireless were lagging behind Verizon Wireless and sales had not met expectations of the top executives for both companies. The CEOs of both Cingular and AT&T believed that a merger would immediately bolster sales and save their companies a lot of money. When the merger began, Cingular began a mass layoff of employees. The only employees who were safe from being laid off were the top company managers and executives. On the other hand, since AT&T is absorbing Cingular, most employees were able to keep their jobs.

One of the main reasons why Cingular and AT&T lagged behind Verizon was that Verizon Wireless has superior phones and service compared to the two other companies. Verizon is famous for its ad campaigns that show that Verizon does not have dropped calls and that you can get service almost anywhere. In fact, with Verizon cell phone service, users can get phone service underground and in subway stations. AT&T is still struggling for user reception as some users are complaining about the slow progress for getting service. I was recently unable to contact my friend through my cell phone because he was inside a Wal-Mart store and did not get service. It is these types of bugs that AT&T with Cingular must correct.

The phones are also superior that Verizon uses. You may have seen Verizon's advertising campaign for their new phone called the Blackberry which has cell phone service, internet access, text messaging, pictures, video and much more. Verizon's new phone will now be competing with the Apple iphone which made a big splash in the market by CEO Steve Jobs. If AT&T's new merger is to succeed, they will need to do a better job of keeping up with Verizon and Apple.