SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
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AT&T WIRELESS SERVICES, INC.
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[Cingular Logo] [AT&T Wireless Logo]
Clay Owen David Caouette,
Cingular Wireless AT&T Wireless
404-236-6153 425-894-4160
clay.owen@cingular.com david.caouette@attws.com
Jennifer Bowcock Peter Rowe
Cingular Wireless AT&T Wireless
404-236-6319 425-241-8629
jennifer.bowcock@cingular.com peter.rowe@attws.com
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Note: Cingular will hold a webcast for media at 10:00am EST, Feb 17 on
http://www.firstcallevents.com/service/ajwz400343753gf12.html
Cingular will hold a webcast for investment analysts at 11:30am EST on
www.sbc.com/investor_relations and www.bellsouth.com/investor.
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CINGULAR TO ACQUIRE AT&T WIRELESS,
CREATE NATION'S PREMIER CARRIER
$41 billion deal to create number one wireless carrier, bring greater network
coverage, improved service quality, new advanced data services to customers
ATLANTA - Feb. 17, 2004 - Cingular Wireless LLC, a joint venture between SBC
Communications Inc. (NYSE: SBC) and BellSouth Corp. (NYSE: BLS), announced today
an agreement to acquire AT&T Wireless (NYSE: AWE), creating the premier wireless
carrier in the United States. Today, the combined company would have 46 million
customers and one of the most advanced digital networks in the U.S., with
spectrum in 49 states and coverage in 97 of the top 100 markets. The combined
2003 annual revenues of the two companies would have exceeded $32 billion.
Under the terms of the agreement approved by the boards of directors of Cingular
and AT&T Wireless, shareholders of AT&T Wireless will receive $15 cash per
common share or approximately $41 billion. The acquisition, which is subject to
the approvals of AT&T Wireless shareholders and federal regulatory authorities,
and to other customary closing conditions, is expected to be completed as soon
as late 2004.
"This is great news for America's wireless users," said Stan Sigman, president
and CEO of Cingular Wireless. "By combining the strengths of these two companies
we expect to accelerate the availability of advanced wireless services for
consumers. This combination is expected to create customer benefits and growth
prospects neither company could have achieved on its own and will mean better
coverage, improved reliability, enhanced call quality and a wide array of new
and innovative services for consumers."
"Today's announcement is a triple win for AT&T Wireless shareowners, customers
and employees," said John D. Zeglis, AT&T Wireless Chairman and CEO. "For
shareholders, the transaction provides a handsome return on investment. For
customers, this means all the advantages only the nation's largest wireless
company can provide. For employees who become part of the combined company,
this means more opportunities than they otherwise would have had with AT&T
Wireless as a standalone company."
Sigman continued: "Wireless communications is one of the most significant growth
drivers in the telecommunications industry, and with the acquisition of AT&T
Wireless, we believe no other company will be better positioned than Cingular to
grow with the market's continued expansion. The new company will have a strong
foundation to begin rolling out exciting new services and data applications that
enrich the end-user experience."
BIGGER NETWORK, BETTER COVERAGE
Customers of the new company will have access to the largest GSM network in the
United States. GSM is the world's most widely used wireless technology with
nearly one billion customers in more than 200 nations. Because both companies
use the same technology, the network integration will bring customers almost
immediate improvement in coverage and call quality. Cingular customers also will
have the widest choice of handsets and devices in the industry.
Because of improved spectrum holdings, the new company should be able to
accelerate its offering of advanced wireless data services and pave the way for
high-speed third generation services in the future. This is important because
consumers and businesses are increasingly relying on wireless internet and
e-mail access. Cingular and AT&T Wireless have been leaders in rolling out
high-speed wireless data offerings, including GPRS (General Packet Radio
Services), EDGE (Enhanced Data rates for GSM Evolution) and trialing next
generation UMTS (Universal Mobile Telecommunications System).
In addition, the new combined company will be well positioned to deliver
unmatched services for business customers, including high-speed wireless
connectivity for PCs and wireless e-mail devices - such as BlackBerry(R) -- for
mobile executives.
IMPROVED OPERATING EFFICIENCIES
Cingular expects to achieve significant operating synergies through this
acquisition by consolidating networks, distribution, billing, procurement,
marketing, advertising and other functions. The company expects to generate more
than $1 billion in operating expense and capital expenditure savings in 2006,
and in excess of $2 billion in annual savings beginning in 2007.
WIRELESS LEADERSHIP
"Cingular has a solid track record of successfully integrating companies," said
Sigman. "Three years ago, we created Cingular by combining two of the strongest
regional wireless companies in the United States. We also created one of the
best-known and most recognizable brands in America. Now, we have the opportunity
to use our combined resources to provide wireless users with services that are
second-to-none."
The boards of Cingular and AT&T Wireless have approved the merger agreement. SBC
Communications and BellSouth have committed funding to Cingular for the all cash
deal. Funding requirements for SBC will be approximately $25 billion and for
BellSouth, approximately $16 billion. Cingular expects the combined operations
will generate positive free cash flow in 2005. Both SBC and BellSouth expect
to have some dilution to GAAP and cash earnings per share in 2005 and 2006. Cash
earnings per share for both SBC and BellSouth are expected to be accretive in
2007. GAAP earnings per share for BellSouth are expected to accretive in 2008
and accretive for SBC in 2007.
SBC's and BellSouth's proportionate equity stake in Cingular will remain
unchanged following the transaction, with SBC holding 60 percent and BellSouth
40 percent of the equity. Management control will remain 50-50.
ABOUT CINGULAR WIRELESS
Cingular Wireless, a joint venture between SBC Communications (NYSE - SBC) and
BellSouth (NYSE - BLS), serves more than 24 million voice and data customers
across the United States. A leader in mobile voice and data communications,
Cingular is the only U.S. wireless carrier to offer Rollover(TM), the wireless
plan that lets customers keep their unused monthly minutes. Cingular has
launched the world's first commercial deployment of wireless services using
Enhanced Data rates for GSM Evolution (EDGE) technology. Cingular provides
cellular/PCS service in 43 of the top 50 markets nationwide, and provides
corporate e-mail and other advanced data services through its GPRS, EDGE and
Mobitex packet data networks. More information about the company is available at
www.cingular.com.
ABOUT AT&T WIRELESS
AT&T Wireless (NYSE: AWE) is the second-largest wireless carrier, based on
revenues, in the United States. With 21.980 million subscribers as of December
31, 2003, and revenues of more than $16.6 billion over the past four quarters,
AT&T Wireless delivers advanced high-quality
mobile wireless communications
services, voice and data, to businesses and consumers, in the U.S. and
internationally. For more information, please visit us at www.attwireless.com.
CAUTIONARY LANGUAGE CONCERNING FORWARD-LOOKING STATEMENTS
Information set forth in this news release contains financial estimates and
other forward-looking statements that are subject to risks and uncertainties.
While not exhaustive, some factors that could affect future operating results,
financial position and cash flows and could cause actual results to differ
materially from those expressed or implied in the forward-looking statements
are:
o the pervasive and intensifying competition in all markets where we
operate;
o failure to quickly realize capital and expense synergies from the
acquisition of AT&T Wireless as a result of technical, logistical,
regulatory and other factors;
o problems associated with the transition of our network to higher speed
technologies caused by delayed deliveries of infrastructure equipment
and handsets, cost overruns, perceived service degradation as more
spectrum is devoted to new technologies, customer dissatisfaction with
new handsets that operate on multiple networks to accommodate our
technology migration, equipment malfunctions and other factors;
o slow growth of our data services due to lack of popular applications,
terminal equipment, advanced technology and other factors;
o shortages and unavailability of spectrum for new services and
geographic expansion;
o pervasive and prolonged adverse economic and employment conditions in
the markets we serve;
o changes in available technology that make our existing technology
obsolete or expensive to upgrade;
o the final outcome of FCC/DOJ review, including rulemakings, and
judicial review, if any, of such proceedings;
o impact of local number portability on our growth and churn rates,
revenues and expenses;
o enactment of additional state and federal laws, regulations and
requirements pertaining to our operations;
o availability and cost of capital;
o impact of any industry consolidation; and
o the outcome of pending or threatened complaints and litigation.
Cingular, SBC and BellSouth disclaim any obligation to update or revise
statements contained in this news release based on new information or otherwise.
###
In connection with the proposed transaction, AT&T Wireless Services, Inc.
will be filing proxy statements and other materials with the Securities and
Exchange Commission. INVESTORS ARE URGED TO READ THE PROXY STATEMENT AND THESE
MATERIALS WHEN THEY ARE AVAILABLE BECAUSE THEY CONTAIN IMPORTANT INFORMATION.
AT&T Wireless and its officers and directors may be deemed to be participants in
the solicitation of proxies with respect to the proposed transaction matters.
Information regarding such individuals is included in AT&T Wireless's proxy
statements and Annual Reports on Form 10-K previously filed with the Securities
and Exchange Commission, and in the proxy statement relating to the merger when
it becomes available. Investors may obtain a free copy of the proxy statements
and other relevant documents when they become available as well as other
materials filed with the Securities and Exchange Commission concerning AT&T
Wireless and these individuals at the Securities and Exchange Commission's
website at http://www.sec.gov. These materials and other documents may also be
obtained for free from: AT&T Wireless at AT&T Wireless Services, Inc., 7277
164th Avenue NE, Building 1, Redmond, Washington 98052, Attn: Investor
Relations.