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Growth Strategies Case Study
Case Title:
AT&T and BellSouth Merger: Reshaping the US Telecom Industry?
Publication Year : 2006
Authors: Himani Bansal, Sumit Kumar Chaudhuri
Industry: Local Exchange Carriers
Region: USA
Case Code: GRS0155
Teaching Note: Not Available
Structured Assignment: Not Available
OR
Abstract:
This case captures the evolution of the US telecom industry and the competitive scenario of the industry after the implementation of the Telecommunications Act of 1996. Besides, the rapid technological changes in telecommunications sector coupled with digitisation and integration of telecommunication services with computers have created intense pressure on traditional pricing structure, especially in voice telephony. This has led to a consolidation in the US telecom industry, the biggest example being the proposed merger between AT&T and BellSouth. However, analysts observe that the prime challenge for the US telecom industry would be the question of survival, as consumers might be unwilling to pay a premium for the innovative services which the telecom companies are introducing in rapid succession.
Pedagogical Objectives:
- To understand the evolution of the US telecom industry, the rise of AT&T as a monopoly and the effect of telecom deregulation on the industry
- To discuss the concept of digital convergence and how it is transforming the once segmented US telecom market into a converged market
- To discuss the role of the Federal Communications Commission in allowing small telecom companies in the US to consolidate and form a few big companies to offer similar products through different media
- To analyse the financial viability of the AT&T and BellSouth merger.
Keywords : US telecommunication industry; Consolidation in US telecom industry; Digitisation in US telecom industry; RBOCs (Regional Bell Operating Company); Growth Strategies Case Study; BellSouth; MCI; Verizon; Southwestern Bell Corporation; Mergers and alliances in the US telecom industry; Synergies in the US telecom industry; Bundling services; Telecommunication Act 1996
Contents :
US Telecom Industry: Regulations Rein in the Market Power
US TelecomIndustry: The Forced Convergence
Converged Markets with Triple Services
Value Chain in the Communication Industry
US TelecomIndustry: The (UN)Warranted Consolidation?
Reasons for the Acquisitions of AT&T and MCI
Potential Synergies from the Deals
The Gainers and Losers
Expected Synergies from AT&T and BellSouth Merger
