NEW YORK — Say goodbye to one national cell phone company, and hello to two more.
While the industry is hopeful that the buyout of AT&T Wireless by Cingular Wireless will ease competition by eliminating one national rival — and possibly more if the merger prompts more deals — two other telephone companies are poised to crowd the market with their own national wireless offerings.
Qwest Communications International Inc., the local phone company across the Rocky Mountains and Northwest, is expanding its regional cell service with the introduction of national coverage and calling plans.
The services will be provided over Sprint Corp.'s wireless network under the Qwest Wireless brand, which currently has nearly 1 million subscribers on regional calling plans.
The Qwest launch came only days after AT&T Corp., former parent of AT&T Wireless, asserted that it too would likely introduce a "virtual" mobile phone service using another company's network. The service would probably be sold under the AT&T Wireless brand, which AT&T will regain control of after its former subsidiary is acquired by Cingular.
The moves by Qwest and AT&T offer further confirmation that the bundling of multiple services — telephone, Internet, wireless and video — on a single bill is becoming a must-have product in the telecommunications business.
"Our focus is really on how can we offer the best telecommunications bundle to our customers, and wireless is an important part of that bundle," said Paul Golden, vice president of product management for Qwest. "That's how we need to compete in the marketplace."
In such an environment, some strategists question whether pure cellular businesses such as Nextel Communications and T-Mobile might be forced into mergers or at least an alliance with a non-wireless company such as AT&T or MCI.
For Sprint, which also serves as the behind-the-scenes carrier for a youth-marketed cell service called Virgin Mobile, the wholesale revenue from Qwest helps defray the hefty cost of operating a wireless network.
At the same time, it is unclear if the competition from yet another rival might intensify the price wars that Sprint and others are hoping might ease some with the departure of AT&T Wireless.
Fortunately for the competition, Qwest primarily views its new national coverage as a means to retain and attract customers within its home territory, so the company isn't planning to wage a coast-to-coast battle.
"Our focus is in our 14-state region, focusing back on where our Qwest customers already are, where we can market a robust bundle," said Golden.
That focus, however, could evolve as the non-geographic nature of voice-over-Internet phone service blurs the traditional boundaries of a Bell company's "territory."
John Polumbo, president of AT&T Consumer, also stressed the competitive imperative of bundling at a recent meeting with investors: "Customers tell us that this is how we would like to have an all-in-one relationship."
Such remarks contrast sharply with assertions by AT&T's prior management that bundling was over-hyped, a rationale they argued in splitting up the company into separate telephone, cellular and cable TV businesses.
Today, nearly every telephone company is looking to bundle both cell phones and cable television with their services.
Qwest and the other three regional Bell phone companies are all adding television to their lineup through joint ventures with satellite cable services. Verizon Communications and BellSouth will be selling DirecTV, while SBC Communications will be offering DISH Network, and Qwest plans to sell both.