October 27, 2005 9:43 AM PDT

SBC to use the AT&T name

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SBC Communications will adopt AT&T's name once it completes the $16.9 billion acquisition of the long-distance company.

The Justice Department today provided regulatory approval and recent news reports indicate that the Federal Communications Commission could provide approval of the merger in the next few weeks, which means the deal could be completed by the end of this year.

SBC, based in San Antonio, Tex., is not well known outside its 13-state territory. But AT&T, formed in 1885 as a subsidiary of the Bell Telephone Company, is known throughout the world.

"The AT&T name has a proud and storied heritage, as well as unparalleled recognition around the globe among both businesses and consumers," Edward E. Whitacre Jr., chairman and CEO of SBC, said in a statement. "No name is better-suited than AT&T to represent the new company's passion to deliver innovation, reliability, quality, integrity and unsurpassed customer care."

Once the merger is complete, SBC plans to introduce a new logo and stock ticker symbol. It will also begin heavily marketing the brand.

AT&T was forced by antitrust regulators to break apart its operations in 1984. That spawned the creation of seven so-called Baby Bells, including SBC, which focused on local telephone services, while "Ma Bell" served as a long-distance carrier.

As the long-distance telephone service market declined, AT&T's valuation plummeted. Residential customers replaced their home phones with cellular phones that offered free long-distance calling.

Despite such challenges over the past few years, AT&T has built a strong enterprise business using its global IP-based network, which serves some of the largest corporations in the world. Local-telephony provider SBC saw the AT&T enterprise business as a key component to upcoming business strategies.

This merger comes as the communications industry has been undergoing drastic changes. New technologies, such as IP and wireless, are forcing carriers to deliver more than just plain telephony. To compete with cable companies, which have begun offering voice services, large phone companies such as SBC have been building new fiber networks to offer customers high-speed data and television service in addition to voice calling.

 

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