Coast to Coast: SBC tries to grow wireline, wireless with SNET

SBC Communications led off 1998 with the first-but probably not the last-telecommunications merger of the year, agreeing last week to acquire Southern New England Telecommunications for $4.4 billion in stock.

SBC's acquisition of Connecticut's long-time telco, though, has raised regulatory and competitive issues. The carriers expect the deal to take most of 1998 to complete.

The move will benefit both companies. SNET already offers long-distance, wireless, Internet and data services, and it will get a strong partner with which to battle future competition.

"We realized we needed to hook up with a quality company to ensure our long-term competitiveness," said Daniel J. Miglio, SNET's chairman.

SBC, which offers wireless services in Boston, upstate New York, Washington and Baltimore, can spread its wireless offerings to Connecticut, Rhode Island and western Massachusetts through SNET's established ties.

SBC also will benefit from SNET's three years of experience as a local and long-distance carrier.

"It's clear that SBC does not expect SNET to make them a long-distance carrier by acquisition alone, but neither will SNET's capability to offer long-distance in Connecticut be removed," said Tom Nolle, president of CIMI Corp. "So SBC can look at the various hurdles-billing, marketing, logistics-that SNET has already cleared."

The proposal faces review by the Justice Department, the FCC, SNET shareholders and the Connecticut Department of Public Utilities Control. SBC, which acquired Pacific Telesis last year, expects no problems.

"Acquisitions are difficult, but we've done well with Pac Bell, and that's behind us now," said Edward E. Whitacre Jr., SBC chairman and CEO, who bristled when it was suggested another merger was premature.

SNET is "a well-run company, and the merger will run smooth. This is not premature," he said.