AT&T gets foot in local door with takeover
AT&T Corp's US$11.3 billion takeover of Teleport Communications Group was welcomed yesterday as a first step in resurrecting the communications giant and revitalising its competitive appeal to business customers.
The United States' largest long-distance telecommunications group yesterday confirmed it had taken its first step in building a presence in the increasingly lucrative local business market.
It said the move would accelerate its efforts to bring end-to-end communications services to US businesses.
The acquisition will give the firm access to a optical-fibre network spanning 250 communities across the country, and a ready-made customer base of frequent telecoms users including banks, brokerage firms, media companies and government offices.
Teleport is also an Internet provider, and following an impending acquisition of ACC Corp of the US, it will also start supplying telecom services internationally.
Local telecom group BellSouth Corp reacted angrily to the proposed tie-up and said it planned to file a formal opposition.
BellSouth said such consolidation in the telecom industry would be harmful to consumers unless companies, such as the regional firms, were allowed to bring more competition to the long-distance market.
AT&T chairman and chief executive officer Robert Armstrong dismissed those concerns and hailed the deal as 'a great match with powerful financial and strategic synergies for both companies'.
'Joining forces with [Teleport] will speed AT&T's entry into the local business market, reduce our costs and enable us to provide businesses the any-distance services they want,' he added.
The company expects the merger to begin contributing to earnings within the first full year of the deal.