In a strategy switch, SBC decides to stick with the better-known brand

Thursday, October 27th 2005, 8:43 am
By: News On 6

NEW YORK (AP) _ The storied AT&T name will live on after the long distance phone company is acquired by SBC Communications Inc., which is renaming itself and most of its products under the 120-year-old brand.

The announcement Thursday came amid reports that federal regulators are set to approve SBC's $16 billion purchase of AT&T Corp., its former corporate parent, in a deal first announced back in January.

The name change had been widely predicted ever since the merger was announced given the global recognition and reputation of AT&T as compared with SBC, a little-known brand outside the 13 states where it provides local phone service.

AT&T, which once stood for American Telephone and Telegraph, traces its roots as a company back to the 1876 invention of the telephone by founder Alexander Graham Bell. But the name did not come into being until a decade later, when it was created as the long-distance subsidiary of American Bell Telephone Company.

San Antonio-based SBC, one of the ``Baby Bells'' created by the 1984 breakup of AT&T's national monopoly, was formerly named Southwestern Bell Corp.

Recent news reports have indicated that the Justice Department and the Federal Communications Commission could approve the merger as soon as this week or next, raising the possibility the deal could be completed by late November _ more than half a year earlier than SBC initially projected.

The name change will not affect Cingular Wireless LLC, a joint venture between SBC and BellSouth Corp. that became the nation's largest cell phone provider about a year ago with the $41 billion purchase of AT&T Wireless, a former AT&T subsidiary.

The combination of SBC and AT&T will create a company that's either the largest or second largest player in its various markets. Top rival Verizon Communications Inc. is preparing to increase its heft as well with the acquisition of MCI Inc., a deal spurred by the AT&T acquisition.

AT&T was far more profitable than its Bell offspring until the past decade, as new rivals and technologies such as cell phones and e-mail began eating away at the long-distance business.

Last week, the company reported that its customer base had sunk below 20 million homes, barely a third of the 60 million it once boasted.

Meanwhile, interstate and international phone service now sells for just pennies a minute, down from the dollars per call such services once generated.