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Proposed Merger of 2 US Telephone Companies Would Create Huge Company


Two U.S. companies have announced a merger that would create the country's largest telecommunication business.

On Sunday, AT&T, Incorporated, said it would acquire a smaller rival, BellSouth, in a deal valued at about $67 billion.

The merger would save about $2 billion per year in operating expenses for the two companies, which already jointly own the nation's largest wireless carrier, Cingular.

In 1984, U.S. regulators forced the nationwide telephone company, known as AT&T, to split into seven regional providers of telephone service. The smallest of those firms, SBC, has since grown to the largest, taking over the AT&T name when it acquired that firm last year.

Changes in the telecommunications business have prompted the string of mergers and acquistions.

If regulators approve this latest deal, there will be three primary U.S. telecommunications providers: AT&T, Verizon, and Qwest.

Some information for this report was provided by AFP, AP, Bloomberg and Reuters.
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