Interview: Cingular Wireless---de la Vega, Rafael---Chief Operating Officer
>> cingular wireless is now the nation’s largest mobile phone company. the company has closed on its purchase of at&t wireless for $41 billion in cash. now cingular must find a way to keep its 46 million customers as it combines operations even as rivals including verizon try to lure them away. to talk about the strategy, we welcome chief operating officer, rafael de la vega, coming to us from atlanta, georgia. welcome.
>> it’s great to be here.
>> let me ask you about the combination. when you put the companies together, the government required divestitures. what is the first thing you’ll do and how long will that take until it’s taken care of?
>> we have 120 days to divest of those properties and we will work with a trustee to make sure the properties are managed in such a way to to maximize the value of the assets so we’ll be diligent in looking after the properties to make sure they’re managed well and turned over as soon as possible.
>> how many stores do you have to close and customers do you have to give up?
>> 300 to 350,000 customers and i don’t have the exact number of stores but a small number of stores itch i presume at some point you can go back after those customers?
>> for the time being, we are not permitted to go after them but in the future our customers will have a choice. today, customers have a great choice with local number portability and they’re free to choose their provider.
>> local number portability had growing pains with people complaining when it first went into operation. as you merge the two companies, do you see problems?
>> no. i think those processes are more mature and are working better and i think the customers are still going to get great service.
>> you have two different systems operating―the g.s.m. system and the system that had been used in the united states co-division. how do you merge those two? which one comes out on top and which strategy do you pursue?% -
>> great thing about the combination is that both at&t wireless and cingular wireless use g.s.m., the most commonly used international standard for wireless. so we’ll be able to sell g.s.m. technology, beginning in about 30 days, exclusively what we will sell.we’ll make sure our customers have a great experience and the benefit of using that technology, it is so widely used in the world, they’ll be able to use their phones just about anywhere they go internationally and get great coverage. in fact, cingular wireless, the new cingular, will have the largest global coverage of any provider in the u.s. now that we have merged.
>> i know that you’re enthusiastic about your ability to manage the combination but companies usually run into hitches as they merge operations and this is a time when the competition moves in. how do you fend off verizon and t-mobile and others as you try to make this happen smoothly?
>> first of all, we give customers a great value and i think the new cingular will give customers exceptional value. they’ll have coverage in 49 out of the 50 states, in all the nation’s top 100 markets and access to the nation’s largest digital voice and data network in america. they’ll have access to the largest mobile-to-mobile calling community in america and great global coverage. in addition, we know as the mergers come together, there are some things that sometimes we need to have extra care and we’re going to talk to our employees to make sure they give our customers exceptional handling in the next 30 to 90 days until we get the merger well behind us and we can begin to provide common services across all the stores and platforms in our company.
>> let me ask you this from a customer’s perspective, you’re talking about the advantages of your company. the others will talk about the advantages of their companies. how do you break through that and convince people that cellular service is not just a commodity, that one’s pretty much the same as the other?
>> i think one of the things that we’re going to be able to offer our customers is we’ll differentiate ourselves in quality, coverage, innovative and creative new services. today, with the beginning of putting these companies together, the customers are immediately going to begin getting better coverage. so that promise is coming to fruition quickly. in addition to that, when you combine networks of both companies, they’re going to see better quality. and then finally with the spectrum and assets we’ll be able to put together, customers will see differentiated services that are exclusive to cingular, that are easy to buy, easy to use, that will make their lives easier so we’ll put a great deal of emphasis on making things simple for the customer to buy, use and simplify their lives and i think that’s what’s bringing value to the customers.
>> anything extra we’ll see in the earnings reports in terms of charges for the merger or layoffs to rationalize operations?
>> we previously announced expected charges as a result of putting the companies together, launching advertising plans and beginning the combination and i think those estimates have not changed from what we have previously determined and as we get into the end of the year, we’ll be able to reassess whether those initial savings estimates are valid and right now this is the first day and we’re pleased to have the merger complete and on its way.
>> thank you very much, rafael de la vega, chief operating officer of cingular wireless. for the first time, hedge fund managers will have to register with the securities and exchange commission.% that story coming up next.
