Our case study titled, The AT&T and McCaw merger negotiation, provides us with an opportunity to negotiate the terms of the merger between McCaw cellular and AT&T. McCaw was the largest competitor in the rapidly growing cellular telephone communications industry. AT&T was the dominant competitor in long-distance telephone communications in the United States, and one of the largest corporations. Prior to the negotiations, it had no position in cellular communications.
Brief Insight: McCaw Cellular Communications
McCaw Cellular was a Kirkland, Washington-based wireless provider operating in the largest urban areas under the name Cellular One. McCaw had been one of the first to recognize that cellular (or wireless) communication technology offered consumer incredible conveniences never before dreamed possible in a largely wired nation. In the early 1980s, McCaw realized that communications could occur between people instead of only between locations.
Brief Insight: AT&T
The American Telephone & Telegraph Company, in its later years simply AT&T Corporation, provided voice, video, data, and Internet telecommunications and professional services to businesses, consumers, and government agencies. During its long history, AT&T was at times the world's largest telephone company, the world's largest cable television operator, and a regulated monopoly.
At its peak, it employed one million people and its revenue was roughly $300 billion annually in today's dollars (for comparison, ExxonMobil's 2006 annual revenue was $377.6 billion). In 2005, AT&T was purchased by Baby Bell SBC Communications for more than $16 billion, who then changed its name from SBC to AT&T Inc. The original AT&T Corporation continues to legally exist as a subsidiary of AT&T Inc.
The case in hand talks about AT&T bringing a new form of business in the telecommunications, through Merging with McCaw Cellular Communications naming AT&T wireless.
Risks for AT&T
AT&T’s Possible Financial Risks