AT&T Gets New Life in Wireless Market With Sprint Deal

The agreement, which includes both business and consumer services, is effective immediately. Financial terms were not disclosed.

As a part of the deal, AT&T will offer new wireless services as a Mobile Virtual Network Operator, or MVNO. AT&T Chairman and CEO David Dorman said the move should enable the carrier to get back into the mobile phone business without laying out a significant amount of money.

"In a world where customers increasingly desire the flexibility of mobile communications, we are confident that they will want to buy AT&T wireless services from one of the most trusted names in communications," Dorman said in a prepared statement. "AT&T has proved it is capable of rolling out bundles of new and complex services quickly and cost-effectively, and we are excited to have this important capability that will help us better serve customers."

Kevin Crull, AT&T senior vice president and general manager for wireless services, echoed these sentiments and emphasized the company intends to widen availability of its wireless service by adding to popular consumer bundles of communications products. During a conference call Tuesday morning, Crull said products such as the AT&T OneRate local and long-distance plans and AT&T's CallVantage VoIP services were among those anticipated to expand.

A host of wireless services from the Bedminster, N.J.-based carrier also will be offered to enterprise, and small- and medium-sized business (SMB) customers. Crull added that as integration of wireless handsets with WiFi networks improves over the next 18 months, AT&T plans to offer handsets that also allow customers to make VoIP calls over broadband connections in homes and businesses.

"We see this as a time for growth," he said. "We are looking forward to expanding our services across the board."

Under the agreement with Sprint, AT&T will provide its own unique content and applications, operator assistance, 411 information service, customer care, billing and handsets, allowing it to differentiate much of its customers' experience. The company also plans to carry long distance and international calls made by its wireless customers over its own long-haul network.

Additional terms of the deal include freedom for both parties to compete in the marketplace without restrictions, and the ability for AT&T to incorporate ISP platforms, value-added voice services, and Virtual Private Networking services into Sprint's existing wireless data network. For Sprint President and COO Len Lauer, this final benefit was the one that sealed the deal.

"We are delighted that AT&T has expressed their strong vote of confidence in the performance and capabilities of our nationwide CDMA network," he said. "We believe this agreement provides substantial positive benefits for both of our companies."

Telecommunications industry experts opined that the move will help AT&T compete with operators like Verizon and SBC Communications, which already use their stakes in the top U.S. wireless services to combine mobile offers with their declining traditional businesses. Cingular Wireless, part-owned by SBC, agreed to buy AT&T Wireless Services in February.

Through Tuesday's deal with Sprint, AT&T will be able to sell mobile services under its own brand again after the close of the Cingular/AT&T Wireless acquisition, expected to happen in the fourth quarter. AT&T is currently testing wireless services in select markets across the U.S., and company officials indicated that most of these services should be available to channel partners and customers sometime later this year.