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Archive for Friday, February 11, 2005

Sprint chief: AT&T deal likely dead

Company predicts modest growth in ‘05

February 11, 2005

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— A deal allowing AT&T Corp. to sell wireless services to its business customers using Sprint Corp.'s network is probably dead in the wake of AT&T's planned merger with rival telecommunications giant SBC Communications Inc.

Gary Forsee, Sprint's chairman and chief executive, told reporters Thursday following a meeting with analysts in New York the deal would be trumped by SBC's part-ownership in cell phone competitor Cingular Wireless.

"I think you can expect that ... will not happen," Forsee said. "As their merger goes forward, they have a new wireless partner and that's not a surprise to us."

AT&T spokesman Gary Morgenstern said he couldn't speculate on the future of his company's deal with Overland Park-based Sprint, but said company leaders in the past few days had begun taking a "fresh look" at many of the company's business agreements in light of the SBC merger, including the Sprint deal.

Morgenstern said Bedminster, N.J.-based AT&T still planned to provide wireless services to businesses.

Analysts last week raised the possibility the agreement could be hurt when the $16 billion deal between San Antonio, Texas-based SBC and AT&T was first announced. Sprint officials initially said the merger wouldn't affect the deal, which was announced last May. Sales were expected to begin during the first half of this year.

Also Thursday, Sprint said it expected modest revenue growth in 2005, although the predictions didn't include any effects of the company's pending merger with Nextel Communications Inc.

The company said it anticipated continued strong sales in its wireless division, and officials said that would make up for continued sluggish sales in local telephone service and steep declines in the company's long-distance business.

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