<p>AT&T's $79.3 billion purchase of BellSouth, approved by the Justice Department Wednesday, would better position AT&T to increase its share of big business customers by creating more of a one-stop shop for clients with far-flung operations.</p><p>But analysts question whether the deal will serve as much of a weapon in the growing battle with cable TV providers targeting consumers and small business segments. The phasing out of the BellSouth brand and the name of the two companies' wireless venture, Cingular, also poses significant challenges.</p><p>"They are going to be dominant in a certain segment, but that's not going to make up for the weakness or the competition in other segments," said Patrick Comack, a telecom analyst in Miami.</p><p>Major corporations that are used to getting their local phone and Internet service from Atlanta-based BellSouth Corp. would get it from San Antonio-based AT&T Inc., and the company could use that leverage and the power that comes with owning the infrastructure to increase its share of big business customers.</p><p>Officials at several big businesses in BellSouth's hometown of Atlanta, including Coca-Cola and Delta, either declined to comment on the pending changeover to AT&T or did not immediately return calls seeking comment. The Home Depot said in a statement that it is too early to determine how the changeover will impact the list of vendors that supply the nation's largest home improvement store chain with telecommunications services.</p><p>"They will have 60 percent of the wires that go into the buildings of the Fortune 1000," Comack said of AT&T. "They just will have so much last mile to corporate America, it's out of control. They will be overwhelmingly dominant in not just retaining but capturing more market share in the business arena."</p><p>The consumer side is another story.</p><p>Cable companies are likely to increase their effort to siphon local and long-distance telephone customers and Internet customers away from traditional telephone companies such as AT&T. The cable companies also have an advantage with such customers because of the providers' in-house television and video-on-demand offerings.</p><p>There are still opportunities for AT&T in the consumer and small business segments, however.</p><p>Rich Nespola, chief executive of consulting firm TMNG Inc., said the addition of BellSouth's local phone service area offers AT&T a big opportunity to sell advanced services to consumer and small business customers in the battle against cable players.</p><p>"It's always easier to sell to an existing customer rather than a new customer. That's right out of Marketing 101, and it still holds true. They trust you," he said.</p><p>Meanwhile, Atlanta-based Cingular Wireless LLC, the nation's largest cell phone provider, has spent a significant amount of money building up its brand, particularly after buying the old AT&T Wireless for $41 billion in 2004 and eliminating that brand's name. But the Cingular name will be eliminated early next year assuming the AT&T-BellSouth deal is completed. Federal Communications Commission approval of the deal, which could come as early as Friday, is all that remains. The BellSouth name will be phased out over the next several months, spokesman Jeff Battcher said.</p><p>"There are Cingular billboards everywhere," Comack said. "And AT&T Wireless blew up and their brand got dragged through the mud. I would think if AT&T were smart, they'd call it AT&T or AT&T Mobile. That might be a decent idea. They certainly don't want to call it AT&T Wireless."</p><p>AT&T spokesman Dave Pacholczyk said only that there has been no decision on the exact name or variation of AT&T it will pick for its wireless brand. He would not discuss the impact on customers who currently call Cingular home.</p><p>"As soon as the merger closes, we'll be talking to them a lot," Pacholczyk said. He declined to say what AT&T will tell customers.</p><p>Branding decisions can be difficult after a merger, particularly if both companies' products are well established with consumers. By choosing to get rid of the BellSouth and Cingular names, in which billions of marketing dollars have been invested, AT&T is betting that there's greater long-term benefit in having one unified brand. The company, formerly known as SBC Communications, chose the very same strategy late last year when it acquired AT&T Corp., adopting the long-distance carrier's name in place of its regionally familiar SBC brand.</p><p>AT&T's approach contrasts sharply with that last year by Sprint when it acquired Nextel, renaming the company Sprint Nextel Corp. and keeping alive both cellular brands. Sprint Nextel has struggled in the aftermath of that deal, reporting a sharp earnings drop and troubles winning and keeping customers. The latest sign of those problems came Monday when former Nextel CEO Tim Donahue announced his resignation as Sprint Nextel chairman.</p><p>"They're biting the bullet and actually doing the right thing," Comack said of AT&T. "It's going to be a bundling war out there. They can't make it messy with having another brand in there. They just want to call it AT&T and say, 'You can get everything from AT&T.'"</p><p>Wednesday's anticipated Justice Department decision came just seven months after AT&T announced its intentions on March 5 to buy BellSouth. The deal, originally worth $67 billion, has climbed 18 percent in value as AT&T shares have risen in that time. The shares closed at $32.96 in trading Wednesday on the New York Stock Exchange. Under the agreement, AT&T is also assuming $22 billion in BellSouth debt.</p><p>AT&T is already the largest telecommunications company in the United States, reporting $62 billion in revenue in 2005 and serving customers in Texas, California and the Midwest. BellSouth provides service to nine states in the Southeast and reported $34 billion in revenue in 2005.</p><p>Both companies say the combination would help eliminate challenges they now face in their dual management of Cingular, 60 percent of which is owned by AT&T and the rest by BellSouth.</p><p>___</p><p>AP Business Writer Bruce Meyerson contributed to this report from New York.</p>
