Following months of speculation, regulatory red tape and the seemingly elusive approval by the Federal Communications Commission that came Sept. 29, SBC Communications Inc. and BellSouth Mobility officially came together last week, announcing its joint venture now will be known as Cingular Wireless.
“Cingular is a name that shows the importance of the individual customer, as well as the unity of this joint venture,” said Stephen Carter, president and chief executive officer of Cingular Wireless.
“I absolutely love this name,” Carter said during a conference call announcing the new company.
Cingular will serve more than 19 million customers in 42 of the nation’s top 50 markets, making it the No. 2 wireless carrier behind Verizon Wireless, and pushing the once-dominant AT&T Wireless Services Inc. further down the competitive ladder. Cingular is 60-percent owned by SBC and 40-percent owned by BellSouth.
During the next three months Cingular said it will be working to transition SBC and BellSouth customers to the Cingular brand name, and in January, the 11 different brands offered by SBC and BellSouth all will become Cingular Wireless.
Much like Verizon did, the new name raised many eyebrows because of its awkward spelling and potential pronunciation problems. Carter attributed the unusual spelling to the lack of “real” words available for use on the Internet.
“The possibility of using a correctly spelled name or word is almost non-existent,” Carter said. “Throughout all the testing, everyone immediately announced it correctly,” he added.
SBC and BellSouth’s quest to become a single entity began nearly a year ago when rumors started to fly about the prowess, or lack thereof, of each company in the wake of the merger between Bell Atlantic Corp., GTE Corp. and AirTouch Communications Inc. to form Verizon Wireless. Analysts and industry watchers however, could not ignore how well SBC and BellSouth’s markets complemented each other. Both companies also use GSM and TDMA technologies, and plan to migrate to EDGE to support third-generation services, Carter said.
SBC and BellSouth confirmed in April the rumors and announced they would create a then-unnamed joint venture, kicking off the race to gain approval from the FCC.
The Justice Department required the companies to divest wireless licenses in 16 markets throughout three states as an antitrust condition, including properties in Los Angeles, Indianapolis, and New Orleans and Baton Rouge, La. SBC sold its interest in wireless properties in Indianapolis to AT&T Wireless Services, and in New Orleans to Alltel Corp. A decision on Los Angeles will be made Dec. 18.
A consumer marketing campaign to promote the new name and image is set to begin in January. To help customers during the transition to Cingular Wireless, both SBC and BellSouth said they will offer identical national and regional rate plans. The national plans will be sold under the name “Digital Edge USA,” and wireless Internet service is being offered under the “My Wireless Window” name.
“We’ve got 19 million customers and they’re very used to the existing company … We need to give them respect to give them time to adjust to the new name,” Carter said.
Several challenges lie ahead for Cingular, the most important of which is filling in crucial coverage gaps, including New York City. Carter said the company has been working to remedy its coverage problems, acquiring spectrum in Washington state and the Austin, Texas, area in recent months. He did not specify whether Cingular would bid for a license in the New York City area in the upcoming FCC spectrum auctions.
Also on Cingular’s plate is launching nationwide wireless data services. With a nationwide packet data network courtesy of BellSouth’s Wireless Data division, Cingular already has its foot in the door.
“We’re still evaluating and researching how best to charge for wireless data. Bits and packets aren’t very easy for customers to understand,” said Carter.
He said the company will begin a controlled test of general packet radio services in several California markets during the fourth quarter.
Last week’s announcement also carried with it new speculation that NTT DoCoMo is in talks with Cingular about taking a minority stake in the company. Carter would not confirm these reports, but NTT DoCoMo previously has confirmed it is in talks with several U.S., Europe and Asia carriers regarding alliances.
