May 19, 2004
AT&T has reached an agreement with Sprint that will fuel its return to the wireless business, just as soon as AT&T Wireless -- no longer owned by AT&T -- is sold to Cingular.
AT&T will be selling its new wireless service to its 30 million long-distance customers and will be aggressively packaging wireless deals with its other services. It will also offer prepaid wireless service.
AT&T is the largest provider of prepaid calling cards. The cards are sold through 60,000 retail outlets, including Wal-Mart, which may also sell prepaid wireless phone service.
Sprint also provides network service for Qwest Communications and Virgin Mobile, which has been emphasizing prepaid service and has sold more new business in the first quarter than Sprint itself.
AT&T is likely to offer a wireless calling plan that uses Internet technology -- sending calls over the Internet to avoid having to use local telephone companies to make the "last mile" connection. AT&T spends about $11 billion a year on payments to local phone companies for call origination and termination.
