Forced march of all ATTWS to Cingular?

Jerome Zelinske wrote:
> Are you talking about customers from another company that went
> belly-up, that they managed to arrange a transition program for, that
> did not just abruptly, completely discontinue their old service? It is
> unreasonable for those customers to expect the transition program to be
> a total continuation program instead. cingular is not the source of the
> problem, the now defunct carrier caused the problem by going out of
> business.

Whoa. They didn't go out of business. Cingular bought them lock, stock
and barrel, including their obligations.

--
All relevant people are pertinent.
All rude people are impertinent.
Therefore, no rude people are relevant.
-- Solomon W. Golomb

---

› See More: Forced march of all ATTWS to Cingular?

[POSTED TO alt.cellular.cingular - REPLY ON USENET PLEASE]

In <[email protected]> on Wed, 26 Apr 2006 14:34:37 -0500,
clifto <[email protected]> wrote:

>Jerome Zelinske wrote:
>> Are you talking about customers from another company that went
>> belly-up, that they managed to arrange a transition program for, that
>> did not just abruptly, completely discontinue their old service? It is
>> unreasonable for those customers to expect the transition program to be
>> a total continuation program instead. cingular is not the source of the
>> problem, the now defunct carrier caused the problem by going out of
>> business.
>
>Whoa. They didn't go out of business. Cingular bought them lock, stock
>and barrel, including their obligations.

Although the difference between merger and acquisition is fuzzy, this was more
a merger than an acquisition. See
<http://www.investopedia.com/ask/answers/05/mergervstakeover.asp>:

In a general sense, mergers and takeovers (or acquisition) are very
similar corporate actions - they combine two previously separate
firms into a single legal entity. ...

A merger involves the mutual decision of two companies to combine and
become one entity; it can be seen as a decision made by two "equals".
...

A takeover, or acquisition, on the other hand, is characterized the
purchase of a smaller company by a much larger one. This combination
of "unequals" can produce the same benefits as a merger, but it does
not necessarily have to be a mutual decision. ...

That Cingular paid cash to complete the transaction doesn't necessarily mean
that it was an acquisition rather than a merger. It simply means that ATTWS
shareholders got cash rather than stock in the merged company.

--
Best regards, SEE THE FAQ FOR CINGULAR WIRELESS AT
John Navas <http://en.wikibooks.org/wiki/Cingular_Wireless_FAQ>

Scott wrote:

> And if those were the only two numbers, it would look great. But some basic
> math shows some not-so-great performance:
>
> - a Net Income of $2.11 per subscriber per month
> - gross adds (new customers) declined over previous quarters
> - ARPU dropped to $48.48

Net additions also fell from the previous quarter. I knew something was
wrong when the churn fell significantly, but net additions also fell.

You'd have thought that the addition of 5000 Radio Shack sales outlets,
combined with lower churn, would have ensured an increase in both gross
and net additions, but the opposite occurred. They also had a very big
decrease in ARPU. Not a good quarter for Cingular in terms of long-term
outlook.

Still, even though net additions, gross additions, and ARPU were down,
they did better than analysts expected, so Cingular did a good job of
lowering expectations so they could appear to do better than expected.

I read one analysts report regarding the decrease in churn, and they
attributed it to the fact that most of the AT&T Wireless customers that
wanted to leave Cingular, finally have finished out their contracts and
have left. So churn should not be going back up to the high > 2% levels
that Cingular has struggled with in the past. The analyst stated that
the various surveys of wireless quality and satisfaction, were one of
the causes for Cingular's falling numbers of new subscribers. People do
pay attention to these surveys, especially the Consumer Report's annual
survey, which is widely quoted in the media (the JD Power Survey is less
well publicized). This is probably a big reason why Radio Shack did so
poorly with Cingular, after having done so well with Verizon.

Scott wrote:

> Didn't realize there was a time limit. They could have done the right thing
> and announced up front what their plans were (Sprint did). Looks like
> another poor management decision- it never should have been said in the
> first place. Now they should be forced to live with their own stupidity.

Cingular did an analysis of how many AT&T customers would leave due to
the higher rates, versus how many would stay despite the higher rates.
They figured that the higher churn was worth it in order to prevent
further erosion of their ARPU. If they had continued to offer the same
rates to AT&T customers, they'd have kept more customers, but they'd
have lost the revenue from those AT&T customers that would stay and pay
the higher rates.

It wouldn't have hurt Cingular to simply state "you can keep your
existing rate plan for as long as you want, but the quality of service
on your network is going to be declining over time."

Jeremy,

Your title is all wrong. How is this a forced march? Who is forcing other
ATTWS to march? Who is forcing you to march?

ATTWS customers want to leave, then leave. Who/what is holding them back?
You left. Why are you still marching?

Move on.

Don
"Jeremy" <[email protected]> wrote in message
news:Qr43g.1288$yI1.451@trnddc04...
>
> "Kathleen" <[email protected]> wrote in message
> news:[email protected]...
>> /delurk
>>
>> I bought GSM phones with AT&T in October 2004 on a year contract. I have
>> been really happy with the service and coverage from day one. We are now
>> looking to switch over to Cingular because my teen's phone crapped out
>> and I
>> don't want to buy another one.
>>
>> Cingular has the best coverage in my area and my friends who have
>> Cingular
>> seem to be pleased with their phones. I guess they just do well in this
>> area, because I have never heard of the problems that have been listed in
>> this thread.
>>
>> With hope and heart,
>> Kathleen
>> ::back to lurking::
>>
>>
>> --
>> Like an unchecked cancer, hate corrodes the personality
>> and eats away its vital unity. Hate destroys a man's sense
>> of values and his objectivity. It causes him to describe the
>> beautiful as ugly and the ugly as beautiful, and to confuse
>> the true with the false and the false with the true.
>> ~ Martin Luther King Jr.
>>
>>
>
> Few of us have complained about their level of network service--just their
> contemptuous attitude expressed toward customers that had cheaper rate
> plans, who did not want to give them up.
>

Don Udel (ETC) wrote:
> Jeremy,
>
> Your title is all wrong. How is this a forced march? Who is forcing other
> ATTWS to march? Who is forcing you to march?
>
> ATTWS customers want to leave, then leave. Who/what is holding them back?
> You left. Why are you still marching?
>
> Move on.

I agree. Cingular isn't forcing anyone to stay, especially now that most
everyone that was under contract with AT&T has had their contract
expire. In fact, one analyst recently wrote that the reason that
Cingular's churn improve by 0.2% (which is actually a very large
improvement) is because all the AT&T customers that wanted to leave,
have finally left.

Sure, it would have been nice if Cingular allowed AT&T customers to
continue with the same rate plan after they switched to Cingular's
networks, but it was a business decision to not allow this. Prices
change, that's life.

Cingular's poor results over the last two quarters, in terms of net
additions, show that customers are fully capable of finding a better
deal elsewhere, and taking it.

SMS wrote:
> Scott wrote:
>
>> And if those were the only two numbers, it would look great. But some
>> basic math shows some not-so-great performance:
>>
>> - a Net Income of $2.11 per subscriber per month
>> - gross adds (new customers) declined over previous quarters
>> - ARPU dropped to $48.48
>
>
> Net additions also fell from the previous quarter. I knew something was
> wrong when the churn fell significantly, but net additions also fell.

Some data from Forbes.com. Mostly good reports about Cingular's 1Q.

From http://www.forbes.com/feeds/ap/2006/...ap2697579.html

As expected, results were strong at Cingular, which reported its first-quarter earnings last week
along with Atlanta-based BellSouth Corp., which owns 40 percent of the venture. San Antonio-based
AT&T owns the rest.

Cingular, already the country's largest cell-phone carrier, ended the quarter with 55.8 million
subscribers, up 5.5 million from a year ago, and contributed $287 million to AT&T's income. Its
revenue of $9 billion was not counted in AT&T's revenue.

From http://www.forbes.com/markets/2006/0...markets02.html

Also helping AT&T’s bottom line is the added wireless gain from Cingular Wireless with its best-ever
first-quarter subscriber growth, Whitacre said. AT&T owns a 60% share of Cingular Wireless in a
joint venture with BellSouth (nyse: BLS - news - people ), with which AT&T announced it plans to
merge.

From http://www.forbes.com/markets/2006/0...markets01.html

Standard & Poor's Equity analyst Todd Rosenbluth also was "encouraged" by Cingular's 1.7 million net
subscriber additions, saying that they were likely driven by a lower churn rate and by reseller efforts.

That said, Cingular's earnings and average revenue per user were lower than the S&P Equity Research
analyst said he expected.

"We think Cingular is making progress on its wireless integration but remains weaker than peer
Verizon Wireless," he said.


-Jason

SMS wrote:
> Sure, it would have been nice if Cingular allowed AT&T customers to
> continue with the same rate plan after they switched to Cingular's
> networks, but it was a business decision to not allow this. Prices
> change, that's life.

I would agree with that, had I not seen the promises Cingular made in
writing (as transcribed in this newsgroup).

--
All relevant people are pertinent.
All rude people are impertinent.
Therefore, no rude people are relevant.
-- Solomon W. Golomb

clifto wrote:
> SMS wrote:
>> Sure, it would have been nice if Cingular allowed AT&T customers to
>> continue with the same rate plan after they switched to Cingular's
>> networks, but it was a business decision to not allow this. Prices
>> change, that's life.
>
> I would agree with that, had I not seen the promises Cingular made in
> writing (as transcribed in this newsgroup).

I'm sure that those promises were vague enough to give them a lot of
wiggle room.

I think that most cellular customers got used to being able to keep the
plan they signed up for, or move to a better plan, even after they were
no longer under contract, and even if they got a subsidized replacement
phone. But they never thought that a carrier would "force" them into a
poorer or more expensive plan, or they might not have chosen that
carrier in the first place. This is how other carriers work, i.e. I can
keep my Verizon Americas Choice I plan, even though Verizon has worsened
their plans and increased the price with Americas Choice II, and would
prefer that existing customers move to the poorer, more expensive plan.
Eventually they may tell AC1 customers to switch to AC2 or leave, but
they're scared that a lot _will_ leave.

Is it possible, that ATTWS saw this as a way to get out from under bad
contracts/accounts?

ATTWS was never a leader in market share. Their profitability was not what
they wanted.

Sell or merge and you get a chance to re-write your service agreements to
something more favorable.

Ask yourself this: If the contracts/customers that ATTWS had were
profitable, why would Cingular *not* try keep them?

Don
"SMS" <[email protected]> wrote in message
news:[email protected]...
> Don Udel (ETC) wrote:
>> Jeremy,
>>
>> Your title is all wrong. How is this a forced march? Who is forcing
>> other ATTWS to march? Who is forcing you to march?
>>
>> ATTWS customers want to leave, then leave. Who/what is holding them
>> back? You left. Why are you still marching?
>>
>> Move on.
>
> I agree. Cingular isn't forcing anyone to stay, especially now that most
> everyone that was under contract with AT&T has had their contract expire.
> In fact, one analyst recently wrote that the reason that Cingular's churn
> improve by 0.2% (which is actually a very large improvement) is because
> all the AT&T customers that wanted to leave, have finally left.
>
> Sure, it would have been nice if Cingular allowed AT&T customers to
> continue with the same rate plan after they switched to Cingular's
> networks, but it was a business decision to not allow this. Prices change,
> that's life.
>
> Cingular's poor results over the last two quarters, in terms of net
> additions, show that customers are fully capable of finding a better deal
> elsewhere, and taking it.

Don Udel (ETC) wrote:
> Is it possible, that ATTWS saw this as a way to get out from under bad
> contracts/accounts?

Indirectly, yes. It's like the S&L crisis where Reagan's deregulation of
the industry allowed the less ethical players to keep offering higher
interest rates in order to bring in deposits, knowing that there was no
way they could ever repay depositors. The depositors knew that their
money was safe, but that eventually the house of cards would collapse,
and then they'd not be able to get the same deal again, from a sound
institution. Interestingly, those depositors profited from the whole
mess, while the taxpayer bailed out the S&Ls.

> ATTWS was never a leader in market share. Their profitability was not what
> they wanted.

They most definitely were a leader in market share at one time.

> Sell or merge and you get a chance to re-write your service agreements to
> something more favorable.

Nothing was rewritten. The slow dismantling of the AT&T TDMA network, as
well as the intentional way that the blue GSM network users could not
use the orange GSM network, meant that eventually the existing AT&T
customer would have to either switch to a less favorable plan, or leave.

> Ask yourself this: If the contracts/customers that ATTWS had were
> profitable, why would Cingular *not* try keep them?

Because they calculated that it would be even more profitable to
eliminate the low revenue AT&T subscribers. They knew that a certain
percentage of customers would stay, even at the higher rates, and they
believed that this percentage of users was more than enough to offset
the users that would leave due to the higher rates. It was a question of
maximizing profitability, not one of profit versus no-profit. It's a
pricing issue that many companies deal with, how do you offer a lower
cost product or service to increase your market share, without having
your existing higher value customers all switch to the lower cost
product or service. It was an impossible situation for Cingular, because
there was no real differentiation, other than price, for the AT&T low
cost plans. On a personal note, my mother got caught in the same
situation as Jeremy. She simply left Cingular. But she isn't still
complaining about it six months later--Cingular got too expensive, and
she switched to T-Mobile.

"SMS" <[email protected]> wrote in message
news:[email protected]...
> Don Udel (ETC) wrote:
>> ATTWS was never a leader in market share. Their profitability was not
>> what they wanted.
>
> They most definitely were a leader in market share at one time.
I used to work for ATT. I can't remember when they were a leader in market
share. I'm in Atlanta, and I remember they opened with a small handful of
stores. They may have gotten a good initial boost because they offered the
service to ATT employees. Another special deal that could not have make
money.

>> Ask yourself this: If the contracts/customers that ATTWS had were
>> profitable, why would Cingular *not* try keep them?
>
> Because they calculated that it would be even more profitable to eliminate
> the low revenue AT&T subscribers. They knew that a certain percentage of
> customers would stay, even at the higher rates, and they believed that
> this percentage of users was more than enough to offset the users that
> would leave due to the higher rates. It was a question of maximizing
> profitability, not one of profit versus no-profit. It's a pricing issue
> that many companies deal with, how do you offer a lower cost product or
> service to increase your market share, without having your existing higher
> value customers all switch to the lower cost product or service. It was an
> impossible situation for Cingular, because there was no real
> differentiation, other than price, for the AT&T low cost plans. On a
> personal note, my mother got caught in the same situation as Jeremy. She
> simply left Cingular. But she isn't still complaining about it six months
> later--Cingular got too expensive, and she switched to T-Mobile.
>
Agreed. It's simply business. Incent the customers you don't want to leave
on their own. Your mother was smart enough to realize it; Jeremy is not.
When the insurance company tripled my rate after 10 years of no claims, I
gave them a call. I asked if they wanted to get out of this business in
this particular area. They said yes. I asked why not just tell me you
don't want the business. He laughed and said "We did. You got the message,
others did not." Strangely others paid the higher rate. I expect the
company tripled the rates again to see if they would get the message. I
wonder how many are left.

Don

Don Udel (ETC) wrote:

> Agreed. It's simply business. Incent the customers you don't want to leave
> on their own. Your mother was smart enough to realize it; Jeremy is not.
> When the insurance company tripled my rate after 10 years of no claims, I
> gave them a call. I asked if they wanted to get out of this business in
> this particular area. They said yes. I asked why not just tell me you
> don't want the business. He laughed and said "We did. You got the message,
> others did not." Strangely others paid the higher rate. I expect the
> company tripled the rates again to see if they would get the message. I
> wonder how many are left.

It reminds me of two instances where a company I worked for really
didn't want to do a product that a customer wanted. One customer wanted
us to build just 1000 network adapters for an Apple II. There was no
other product available from anyone, and we had discontinued the product
years earlier. So we quoted a really high price, $1500 each. Sure
enough, the customer agreed and we had to build them. Another time, a
computer manufacturer insisted on a custom floppy disk controller chip,
even though the standard PC product would have worked. So we quoted a
very high price, and of course they agreed to it. High margins, but low
volume, is not a good model for semiconductors or PC hardware.

"Don Udel (ETC)" <[email protected]> wrote in message



> On a personal note, my mother got caught in the same situation as Jeremy.
> She
>> simply left Cingular. But she isn't still complaining about it six months
>> later--Cingular got too expensive, and she switched to T-Mobile.
>>
> Agreed. It's simply business. Incent the customers you don't want to
> leave on their own. Your mother was smart enough to realize it; Jeremy is
> not.

Not so. Not so.

I understand VERY WELL what they meant when both ATTWS and Cingular promised
that all of our service plans would remain in effect UNTIL WE DECIDED TO
CHANGE. I even posted the exact wording in a previous thread.

I also well understand (now I do, that is) that Cingular intended never to
comply with the spirit of that promise. A couple of months after they took
over the Blue Networks, the dropped calls and inability to get a signal
began.

And I also recall well that ATTWS and Cingular made various PROMISES to the
regulatory bodies, both Federal and in numerous state PUCs, that ATTWS
customers would not suffer as a result of this merger. They also made
similar promises to the Justice Department, in order to be cleared of
anti-trust obstructions to the merger.

I have no problem with their intention to decommission TDMA. We all knew
that was coming. But they are dropping customers even though the TDMA
network is still in operation. They are also forcing GSM Blue Network
customers to switch to the Orange Network AND GIVE UP THEIR RATE PLANS--as
though going from one network to another required higher prices.

They are now about to terminate service involuntarily for the 1% of their
customers that roam too much. Those folks are receiving letters advising
them that their service will be terminated within 30 days--and they are left
high and dry. Most of them have some investment in equipment, and will now
have to find another carrier, perhaps pay a deposit, and purchase new
phones.

Cingular's CONTEMPTUOUS ATTITUDE toward their customers is disgusting. I
should have abandoned ATTWS as soon as the upcoming merger was announced.

By the way, I've been with Sprint PCS for nearly 3 months, and I have
nothing but praise for them. I mention this lest you think that I am merely
a malcontent, intent upon smearing Cingular. I was always quite happy with
ATTWS, and I am equally happy with Sprint. Cingular was forced upon me, the
fit was never good, and I will NEVER consider using them or any of their
related companies for anything (I own a firm that makes not a little use of
communications/data/networking services).

Cingular apparently did not want to LOSE all those ATTWS customers--they
just wanted to SQUEEZE THEM, WHILE RETAINING AS MANY AS POSSIBLE--in order
to dress up their financials. Too bad that wasn't the way they described
their plans to the regulatory bodies (it took them over a year to clear all
the regulatory hurdles before finalizing the merger).

The only thing that I "didn't understand" was how callous those bastards at
Cingular were.

Jeremy wrote:

> Cingular's CONTEMPTUOUS ATTITUDE toward their customers is disgusting.

This much is true, and no one argues with you about that, just look at
the surveys.

But really, unless you had a very high end handset, the cost in
migrating to another carrier is minimal, and you can keep your phone
number. So moving on is the best option here.