Cingular wins the bid for AT&T!

Right after sitting down with my NYT and seeing that Vodaphone is the leading contender, I get an email which says that Cingular is the winner…

Cingular raised its informal offer for AT&T Wireless (AWE: news, chart, profile) by as much as 36 percent as it battled Britain’s Vodafone Group (VOD: news, chart, profile) through the weekend.

The deal, which Cingular expects to close this year pending shareholder and regulator approvals, will shrink the number of competitors in the U.S. mobile market to five from six.

Cingular will become the leading operator with 46 million customers and coverage in 97 of the top 100 markets. It expects to generate savings of more than $1 billion in operating and capital spending in 2006.

Still the price tag, a 27 premium for AT&T Wireless shares as of Friday’s close, drew gasps in London. On Friday, analysts and observers had been predicting bids around $12 a share, up from Cingular’s first indicative bid at $11 – a move that set off the auction.

“At $15 dollars a share, it shows you just how excited the bidding got,” said Morten Singleton, an industry analyst at Williams de Broe in London.

VOD shares surged 6 percent in London. AT&T Wireless surged $2.08 to $13.90. SBC was down 55 cents at $24.50 in light pre-open trade. BLS shares were not yet active, dealers said.

The deal values AT&TW at 9.9 times its underlying earnings in 2005, which is currently higher than what the market has valued each of AT&TW’s European peers.

Vodafone, the largest in Europe, is valued around 5 times underlying earnings, Christian Maher, analyst at Investec Securities in London said. [CBS Marketwatch]

One Reply to “Cingular wins the bid for AT&T!”

  1. Sometimes it is impossible to figure out exactly what some people (and /or corporations) are thinking. My combined experience today with RadioShack, an authorized Cingular reseller, and Cingular service/support while trying to:

    1) Upgrade my account to a more expensive shared plan,
    2) Purchase four new phones,
    3) Transfer two customers from Verizon,
    4) Transfer an additional customer from Nextel,

    proved to be so frustrating that when my contract expires in a few months there is absolutely no doubt that I will be contracting with another service provider.

    Now, going into the transaction I knew that I would be giving up the nearly 3,200 – that’s right, more than 3,000 – Rollover minutes that I have accrued thus far. Until earlier today I was willing to give them up in order to consolidate the various cell phone accounts in our family under what I had, until today, thought of as a customer service oriented company. Initially we had gone to the local Cingular retail outlet, however, due to the nature of the work myself and one of my family members do, we require phones that do not come equipped with a camera. Well, the Cingular outlet only had two such models on display, one of which (the flip phone) was out-of-stock.

    At this point we should have just walked away and looked for another provider for the three other lines; however, we decided to see what RadioShack might have to offer. We were initially encouraged by the fact that they had a flip phone without a camera that seemed to be just what we were looking for. Unfortunately, they only had one in stock and we needed three.

    I KNOW, I KNOW…should have found another provider at that point. However, they said they could get the other two phones from another store and we agreed to return the next day. Well, we ended up calling the store on Monday to let them know we would be unable to return there until today.

    When we arrived it took them a few minutes to find the phones, and it rapidly went downhill from there. First, the sales clerk was obviously inexperienced when it came to processing the transfers and upgrading the plan. So imagine my surprise when the Manager of the RadioShack, after watching the clerk struggle at the computer for a few minutes, announced something to the effect that “I’ve got to get out of here. I’ve got tickets to a Yankees game and a free dinner with a Budweiser distributor and if I don’t leave now I’m going to hit traffic” It was 2:45 p.m.!

    So there we were watching the clerk trying to figure out how to get this done and losing confidence by the second. But, to his credit, he picked up the phone and called Cingular. The first point of contact was in Customer Care (I know this because the clerk had taken the wireless phone he was using and put it on speaker), the customer service rep told the clerk at least three times that he could not help him before finally offering to transfer the call to the proper department. Next thing you know, we’re on hold for at least ten minutes.

    Finally, the a rep in the appropriate department gets on the line and then the fun really started! First, the sales clerk informs me that I am not eligible for an upgrade to my phone for another month. When I asked the Cingular rep (still on speakerphone at this point) if there was anything we could do about that her response was to ask the sales clerk if we were on speaker, when he answered yes, she told him that this was not allowed and, after taking the line off speaker, she jumped all over him (loud enogh that you didn’t need the speaker activated to hear her). The clerk asked her again about the upgrade for my line and she said wouldn’t even discuss the possibility, instead she informed him taht in order to upgrade my plan, which would bring in three new customers, I was not only forfeiting my 3,200 Rollover minutes and ineligible to upgrade my phone until next month (3 NOV to be exact) but that I would also have to extend my contract for an additional 11 months. I KNOW, I KNOW…AT THAT POINT I SHOULD HAVE HEADED OFF TO FIND ANOTHER CARRIER. SHAME ON ME.

    But, no, I decided to hold off on upgrading my phone until I was eligible thinking that if they don’t wnat to sell phones than so be it. So the sales clerk and the Cingular rep start working through the process of transferring the two Verizon lines and, at some point, the Cingular rep requests my FULL social security number. So the clerk hands the phone to me.

    So, now picture this:

    I am talking on a wireless phone,
    in a retail store in a shopping mall,
    to someone I don’t know,
    who if they are who they represet themselves to be, has access to my account record,

    and she asks me for my FULL social security number. Well, just as any self respecting senior executive with more than fifteen years of international security experience (including investigating identity theft and protecting conficdential information) would do, I refused. I told her that I would give her the last four numbers with which to verify my identity. She abrubtly demanded, not asked, to speak with the RadioShack Sales Clerk. He then explained that in order to transfer the other Verizon accounts, which are not currently in my name or associated with my SSN, they would need my full social security number. When I refused yet again, he handed the phone back to me. If I wasn’t so annoyed and frustrated by this point it would have been almost comical.

    I explain to the Cingular rep that:

    1) I have several forms of ID that I can show the clerk,
    2) I will not disclose my full social security number given the fact that I am in a public place, on a wireless phone,
    3) I am “30 seconds away from canceling this entire transaction and, when my account expires, taking my business to Verizon”
    4) that I would like to speak with her supervisor to try and solve the problem

    Her reply was to once again demand to speak with the clerk. Now, at this point I am thinking that all we need is the brightly painted VW and 34 Clowns and we would have the whole darned circus right there in the store.

    So next, the clerk tells me that he can enter my FULL social security number on his system if I give it to him. I am fairly certain that, at that point, he could tell by the look on my face that I was not amused, or perhaps it was the manner in which I told him there was absolutely no way I was going to allow anyone to input my full social security number on a third party computer system to be transmitted over an unknown network that gave me away. Then he tells me that the Cingular Rep said “if you just want to open a whole new account instead of upgrading your existing one we won’t need your social security number at all”.

    Needless to say, at that point, the transaction came to an abrupt halt.
    So, after not one but three attempts to upgrade my plan, purchase four new phones and transfer two customers from Verizon and one from Nextel, I have seen the error of my ways. As soon as my plan expires, I will be finding a new provider. In the meantime, the rest of the family is going with another provider and Cingular can rest assured that I will use every last one of those 3,000+ Rollover minutes before my plan expires.

    ALL BECAUSE A CINGULAR REP, DESPITE BEING TOLD OF THE CONSEQUENCES, WAS UNWILLING OR UNABLE TO EXERCISE GOOD JUDGEMENT AND ENGAGE A SUPERVISOR AT THE REQUEST OF A CUSTOMER.

    I’ve spent enough time in the corporate world to know that this sort of ineptitude and customer disservice is rarely isolated and , more often than not, is indicative of broader management shortcomings, so perhaps this is as much a cautionary tale for shareholders as it is for customers.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.