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AT&T and BellSouth merger - Essay Example

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With the changing environment of business all over the world the need for the companies to audit and update their strategies has also increased. Merger is an important strategy, which is being adopted by most of the companies in order to increase their market share and acquiring other motives…
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AT&T and BellSouth merger
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Download file to see previous pages AT&T and Bellsouth are the two of the world's giant telecommunication company. According to Mark del Bianco, a Communications Attorney who wrote Bumps in the road for AT&T-BellSouth merger, both BellSouth and AT&T own considerable chunks of prime wireless spectrum that is unused and that could quickly and relatively cheaply be used to provide broadband services that would compete with telecom and cable wireline broadband services--in other words, the long-sought "third pipe" to the home or business.
The merging of these two companies will give AT&T and BellSouth an edge over their competitors, and in this case, as Atty. Mark del Bianco have written, competitors will no doubt argue that the Federal Communications Commission and the Justice Department should worry about the loss of inter-modal competition that will result if the two companies are permitted to retain this valuable spectrum.
While AT&T, being the largest phone company, bought BellSouth, of which, being the 3rd largest phone company, this reduced the phone company into 2 large players and consumers are now alarmed because the constant merging of companies gives them fewer choices, of which case, these companies can immediately shoot up their prices. The proposed merger of AT&T and BellSouth means the death of the Internet and the unmasking of fictional competition between telecom companies, charged two Washington, DC-based consumer groups. The Consumer Federation of America and the Consumer Union urged regulators to reject the $67 billion proposal. (Ed Sutherland, 2006)
While the plan gives AT&T to kill the Internet so that they can cableize the Internet connection, Sutherland quoted Gene Kimmelman, Consumer Union vice president for federal and international affairs, which said:
"Congress and federal regulators need to look carefully at the lifeless 'competition' their flawed policies have created and reject this merger."
Cross selling: Through the merger the companies become enable to sell their products to the customers of the other company. The natural combination of two leading wire line providers and joint owners of Singular speeds progress in integrated wireless/wire line services will improve the services provided to the customers.
Financial Benefits: The merger of both the companies will lead to a "financial benefits for stockholders of both companies; an expected net present value of $18 billion in synergies resulting from a more than $2 billion annual run rate in synergies expected in 2008, growing to $3 billion in 2010" (BellSouth Media Room). On the other hand the expected merger will lead to "accrete AT&T ...Download file to see next pagesRead More
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