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AT&T to re-enter wireless market

AT&T Corp. said on Tuesday it reached an agreement with Sprint Corp. that will allow AT&T to sell mobile phone services under its own brand later this year.
/ Source: The Associated Press

AT&T Corp. has reached an agreement with one of its biggest rivals, Sprint Corp., to offer cell phone service over Sprint’s wireless network, the companies announced Tuesday.

The five-year deal will allow AT&T to re-enter the wireless business and pitch another service to its 30 million customers.

The nation’s biggest long-distance telephone company got out of the wireless business when it spun off AT&T Wireless Services Inc. as a separate company in 2001.

AT&T will resume offering wireless services after Cingular Wireless closes its $41 billion deal to buy AT&T Wireless; the deal is expected to close this fall.

The Cingular purchase freed AT&T to use the AT&T Wireless name. That may be a marketing challenge; AT&T Wireless led the industry in consumer complaints last year, according to Consumers Union. Sprint was No. 2.

AT&T’s re-entry into the wireless business is likely to drive rates lower.

The company, which is already testing wireless services in select U.S. markets, said it hopes for a launch later this year.

“AT&T has proved it is capable of rolling out bundles of new and complex services quickly and cost-effectively, with top-notch customers service, and we are excited to have this important capability that will help us better serve customers,” said AT&T chairman and CEO David W. Dorman.

Dorman said AT&T plans to add the wireless service to its AT&T OneRate local and long-distance plans and its CallVantage Voice over Internet Protocol service.