The PhoneBoy Blog


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Marrying Your Parent

A number of reports are out there that SBC has agreed to by AT&T for $16 billion, which is incidently about a third of the price that SBC and Bell South paid for AT&T Wireless (a seperate company). Whether or not the government will approve of this transaction is a different issue entirely.

For those who don’t know the history of telecom in the USA, AT&T (Ma Bell) was the phone company in the US until the early 1980s. AT&T was then broken up into an “Interstate” unit (i.e. Long Distance) whereas local service was to be provided by the “Baby Bells.” The country was carved up into regions and some new companies were created to serve those regions. Southwestern Bell (now known as SBC) was one of those companies.

So what does this have to do with VoIP? It gives SBC a ready-made consumer VoIP offering. Not that SBC couldn’t easily do their own, but in the short term (until the merger was approved and executed) they could easily resell AT&T Call Vantage under their own name (VoIP companies do this all the time). Why bother to build it when the company you are about to acquire has already done it? They could even provide cheap/free call termination for AT&T as a means of paying for this privilege, or even help AT&T provide expanded CallVantage service. Of course, I’m sure the people in charge of SBC aren’t that forward thinking, or there’s some legal problem with that strategy.

I do wonder what will happen with the “deal” that was signed by AT&T to be a mobile virtual network operator with Sprint for mobile phone service? Seems to me both Sprint and AT&T might want to back out of this deal as I’m pretty sure Sprint doesn’t want to give one of its major competitors that kind of access to their network. Cingular probably doesn’t want to pay unnecessary money to Sprint either.

In any case, we live in interesting times in the telecommunications industry.


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