CNET también está disponible en español.

Ir a español

Don't show this again

Christmas Gift Guide
Tech Industry

SBC, Pac Tel merger a done deal

The megamerger between SBC Communications and Pacific Telesis is complete, following approval from state regulators.

It's a done deal: SBC Communications (SBC) today announced its $16.5 billion megamerger with Pacific Telesis Group is complete, following approval from state regulators.

The merger, the nation's third largest completed to date, comes as telecommunications firms brace themselves for competition in the post-telecom reform era.

Under the newly combined company, SBC will serve California and Texas, seven of the top ten markets in the United States, as well as international markets that include Mexico, Chile, South Korea, Taiwan, France, South Africa, and Israel.

But the new company will continue to offer its products and services under existing carriers that are strong in their markets, such as Pacific Bell in California and Southwestern Bell in Texas, Oklahoma, Missouri, Arkansas, and Kansas.

"Exploding demand for Internet access and high-speed data services, strong growth in wireless services, increased demand for basic wireline service, and tremendous opportunities in long-distance and markets outside the United States all point to an exciting future for SBC," said Edward Whitacre Jr., SBC chairman and chief executive, in a statement.

The combined company will have a market value of $47.9 billion and net earnings of $3 billion.

Under the four-to-one vote by the California Public Utilities Commission, SBC is required to pay $341 million to its customers over the next five years, largely in billing credits. Consumer groups, however, were hoping for a much larger payout of around $1 billion.

Competitors, meanwhile, were displeased with the CPUC's decision. "There is little here for consumers to cheer about," said Rian Wren, AT&T vice president of local services, in a statement.

"The real promise of the Telecommunications Act of 1996 is that consumers will have a choice in local phone services," he added. "This merger doesn't speed up anyone's ability to choose between local phone companies. In fact, our concern has been and still is that this merger will slow down the process."