AT&T and BellSouth Merger Will Create Industry StabilityYankee Group Predicts AT&T and BellSouth Merger Will Create Industry Stability

Yankee: Announced that the long-speculated merger of AT&T and BellSouth creates a more stable industry structure, positively affecting both the overall market and customers of the two companies. Although the costly $67 billion merger brings together two strategically different organizations, Yankee Group finds the merger to be a healthy marriage that will enable AT&T to consolidate control of its wireless asset.

While BellSouth focused on maintaining healthy margins and regular dividends, AT&T primarily concentrated on growth through aggressive acquisitions and investments. However, BellSouth’s traditional approach will benefit customers of the combined company. Known for its high customer satisfaction and loyalty with its regional customers, BellSouth’s business and consumer customers will benefit from AT&T's more hard-line product development, deployment and marketing approach to services. Additionally, BellSouth’s small and medium business customers will benefit from AT&T’s pricing strategy, which traditionally has been more aggressive than AT&T’s.

As one of the largest deals in telecommunications history, this merger between AT&T and BellSouth furthers the consolidation of the industry. This deal will anchor AT&T as one of the largest providers in the communications field to provide strong wireline, wireless, television and internet services across the board. Merger of AT&T and BellSouth creates a more stable industry structure

Publ 20060307