What company took over AT&T?
SBC Communications bought AT&T Corp. in 2005; SBC Communication is one of the Baby Bells developed after the dissolution of the original AT&T monopoly in 1984. Here is more information about this union along with its background.
The Breakup of AT&T
Originally, AT&T was a telephone monopoly running much of the Bell System, the twentieth-century telephone system used in the United States and Canada. The eight-year antitrust action the United States Department of Justice launched against AT&T Internet in 1982 forced the company to give up its local phone business but retain its long-distance, research and development, and manufacturing operations.
On January 1, 1984, the Bell System was dismantled, and AT&T was sold into seven regional Bell Operating Companies—also known as the "Baby Bells". Among others were PacTel, Pacific Telesis, Ameritech, Bell South, and SouthWestern Bell. Under AT&T via Bell Labs, research and production as well as long-distance services were similarly consolidated.
AT&T divested the RBOCs which got control over local and regional telephone lines while the company retained its long-distance operations. The objective was to introduce competition in the telephone industry since the Baby Bells could now compete in the different markets. However, as time progressed some of the RBOCs began to merge.
SBC Communications's expansion was much aided by the eventual merger of it with the Baby Bells. Among the more hostile Baby Bells in purchasing other phone businesses was SBC Communications. It started in 1983 when Southwestern Bell Corporation chose to switch to SBC Communications after the AT&T breakup. SBC grew to be among the biggest telecommunication firms in the United States in 1997 buying Pacific Telesis, SNET in 1998, Ameritech in 1999, and the original AT&T in 2005.
SBC acquired the old AT&T Corp in 2005, thus inheriting its large business and consumer long-distance service along with AT&T’s constantly changing Internet protocol service. SBC had attempted an earlier merger in 1997 to acquire AT&T’s cable TV operations and this was rejected by the U.S. Department of Justice based on it being anti-competitive.
However, conditions began to shift early in the new millennium as revenues for long-distance calls shrunk and AT&T faced new competition from national wireless providers such as Verizon. Subsequently, regulators cleared the SBC/AT&T merger in 2005, which at the time was the biggest merger in US business history.
SBC adopts the AT&T brand name SBC Communications Inc. and two separate brands for two different companies that are owned by SBC Communities Inc.
Firstly, after the acquisition of AT&T Corp., for almost a year, SBC continued to operate under the name of AT&T Corp. But in November 2005, SBC decided to adopt the more well-known AT&T brand name in a move to consolidate and market its acquisitions. AT&T had been an American brand for over 110 years having been founded in 1885 while SBC was just another name that sounded nothing like a brand.
Thus, on November 18, 2005, SBC Communications began the process of reintroducing AT&T and resumed using the AT&T globe logo and the company’s old ticker symbol ‘T’. From the perspective of shareholders, it was more like a ‘vertical merger of equals’ since, while SBC was the legal acquiring company, it assumed the AT&T name.
Using the strong AT&T brand in new markets including IP-based television, integrated services, and mobile phone service away from the basic wire-line offerings, the AT&T rebranding was helpful for the corporation. With a series of acquisitions including BellSouth in 2006, Dobson Communications in 2007, Centennial Communications in 2008, and eventually DirecTV in 2015, this convergent services approach would be maintained and the biggest pay-TV provider in America would be the result.
With sales of about $150 billion annually now, the new AT&T Inc. has developed into a technology, media, and telecommunications giant. It is still a market leader in both the wireless and the wired telephones industries as well as the pay television market which it joined when it purchased DirecTV, even if it no longer dominates the telephone business as it once did. Furthermore among the most well-known names in the technology and telecommunications sectors worldwide is the AT&T trademark.
Ultimately, SBC Communications acquired the well-known AT&T brand and moniker upon purchasing the former AT&T Corp, and more than ten and a half years later it has evolved into a telecom and technology corporation. Since it resulted in the creation of a new AT&T with important brands in wireless, landline, internet, and pay-TV sectors, this is maybe one of the larger mergers of the twenty-first century to date.
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