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Global Telecoms Business
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Whitacre: creating a strong north American player

01 December 1999

SBC Communications, the second largest local phone company in the US, has just received permission from the FCC to complete its merger with fellow RBOC Ameritech. It hopes to gain long-distance approval next year. SBC chairman and CEO Edward Whitacre talks to Mark Holmes about the operator's ambitions

The Texas-based Regional Bell Operating Company (RBOC), SBC Communications, is the second largest local telco in the US, with 38 million access lines, equivalent to 20% of the market. This figure will rise to 32%, once its planned merger closes. In May 1998, SBC had announced that it was to merge with fellow RBOC Ameritech in a merger worth $62 billion. The merger will enable SBC to expand beyond its 13 state territory and become a national player in the US.

SBC has a proven track record of merger integration. The operator is already deriving faster than expected synergies from its merger with Pacific Bell. Tom Aust, telecoms analyst at Chase Securities, believes that this merger was the catalyst for ensuing consolidation in the US: "It was smart of them to recognize the opportunity in PacBel when they did. This was a very important and far-sighted merger. It changed the industry. It was the harbinger for...