AT&T Wireless Services Inc has confirmed widespread takeover speculation, and has admitted it is looking at “strategic alternatives”. The announcement came soon after the number-three ranked US wireless operator posted an unexpected fourth-quarter loss amid a number of technical and operational problems.
CEO John Zeglis confirmed to financial analysts that it had received significant interest from a number of companies. The carrier said in an earlier statement that its board of directors has hired financial firms Merrill Lynch & Co and the law firm of Wachtell, Lipton, Rosen & Katz to help review its options.
AT&T Wireless has decided to explore strategic alternatives, Zeglis said Thursday during a conference call with financial analysts. There has been so much interest. It’s a flattering affirmation of the growth pattern we’re on. He declined to state a timetable for completing review of the bids.
The operator is thought to have received expressions of interest from a number of companies including Cingular Wireless LLC, NTT DoCoMo Inc, Nextel Communications Inc, T-Mobile USA Inc, and Vodafone Group Plc.
The frontrunner at the moment is thought to be Cingular, but Vodafone is also seen a a good bet because it is known to be unhappy with its current American operation, where it has a minority stake in the market leader Verizon Wireless.
AT&T Wireless has one of the largest networks in the US, and has overlaid its network with GSM (Global System for Mobile Communications), a technology compatible with most European networks, which would allow greater roaming revenue from globe-trotting customers.
On top of the announcement, AT&T Wireless revealed a net loss for its most recent quarter. Zeglis confirmed that the operator had a difficult quarter. We did hit some operational rough spots in the fourth quarter, he said, but the good news is that those issues are largely behind us. He said the company would focus on retaining customers this year.
AT&T Wireless experienced fourth-quarter churn rates of 3.3%. It blamed a combination of IT systems problems, and subscribers moving to other networks after the ruling that customers could take their mobile numbers with them. The technical problems were associated with its customer care software, and the system it set up for handling the new rules.
This article is based on material originally published by ComputerWire