5th February , 2004

Europe UK : As the US wireless market consolidates, the stakes are increased for any investor bidding for ownership of one of the national operators. The buyer of AT&T Wireless, itself an investor with over 26 million proportionate equity subscribers as of Q3 2003, will not only strengthen its position in the US market but also its global footprint and standing.

The potential sale of AT&T Wireless is likely to continue a trend already evident in the US market. Data from the EMC World Cellular Database shows that at the end of 1998 12 different operators, mostly regional players, accounted for 80% of subscribers but this number had halved by the end of 2003, by which time six national operators together accounted for 125.7 million subscribers, equivalent to 80% of the total market.

The major phase of consolidation came with the mergers and acquisitions that established Verizon Wireless and Cingular Wireless, which launched in April and October 2000 respectively. Since then the number of operators holding 80% of the market has been further reduced by organic subscriber growth of the largest operators and their purchases of local licences. A merger between AT&T Wireless and Cingular Wireless would create a new market leader with over 45.5 million subscribers in the USA alone. Such a move would also reduce competition, easing the price wars that have characterised the market in recent times.

The next phase of consolidation may be underway but according to Paul Mitchell, Research Analyst at EMC, 'the sale of AT&T Wireless, while it may or may not reduce the number of operators in the USA, will undoubtedly affect the rankings of the world's largest investors in the global market.'

According to EMC's World Cellular Investors, AT&T Wireless was the tenth largest investor in the world in September 2003, with 26 million proportionate equity subscribers. Its purchase by Cingular Wireless would allow both of the latter's parent companies, SBC and BellSouth, to break into the top ten investors ahead of Verizon Wireless, with SBC becoming the sixth largest global investor.

If either Deutsche Telekom or NTT DoCoMo were to be successful in buying AT&T Wireless, they too would move up the ranking. A purchase by Vodafone would see it consolidate its second place behind China Mobile.

The next phase of consolidation may be underway but according to Paul Mitchell, Research Analyst at EMC, 'the sale of AT&T Wireless, while it may or may not reduce the number of operators in the USA, will undoubtedly affect the rankings of the world's largest investors in the global market.'

According to EMC's World Cellular Investors, AT&T Wireless was the tenth largest investor in the world in September 2003, with 26 million proportionate equity subscribers. Its purchase by Cingular Wireless would allow both of the latter's parent companies, SBC and BellSouth, to break into the top ten investors ahead of Verizon Wireless, with SBC becoming the sixth largest global investor.

If either Deutsche Telekom or NTT DoCoMo were to be successful in buying AT&T Wireless, they too would move up the ranking. A purchase by Vodafone would see it consolidate its second place behind China Mobile.

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