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AT&T (News - Alert) is eager to get started with the integration of BellSouth (News - Alert) as soon as the Federal Communications Commission gives the official green light to the $67-billion mega-merger, company officials reaffirmed on Monday.

 

“I believe the operational progress we've made this year is a great foundation and frankly I think the timing is right for the BellSouth and Cingular (News - Alert) integration process, which we look forward to getting started in the weeks ahead,” AT&T CFO Rick Lindner said during a conference call to review third quarter earnings.

 

The upbeat sentiment is a result of progress made in the integration of last year’s AT&T-SBC merger, which Lindner characterized as “ahead of schedule.” Through the September quarter, AT&T has realized cost savings of $650 million from the previous combination. The deal enabled AT&T to reduce headcount by 3,600 positions in the third quarter for a total of 10,500 positions year-to-date, which is also ahead of schedule.

 

“So far, execution has been solid and most functions are on or ahead of schedule,” Lindner told financial analysts.

 

AT&T and BellSouth officials had expected to receive all the necessary regulatory approvals by now. But that was tripped up two weeks ago after the Justice Department rubber-stamped the deal just one day before the FCC (News - Alert) was to consider the deal, igniting a furor by lobbyists pushing for special conditions to be imposed on the RBOCs. As a result of uproar, FCC commissioners have now pushed back the deal to November 3 and some analysts now believe it could be further delayed.

 

“We believe FCC and industry players have substantial incentives to strike a compromise by a planned Nov. 3 meeting, but policy divisions and the volatile political equation (both at the Commission and nationally) create a significant potential for delay until after the Nov. 7 election,” said Blair Levin, telecom analyst at Stifel Nicolaus.

 

Complicating the matter is the push by Democrats to guarantee free access to all parts of the Internet but analysts like Levin believe it is highly unlikely that AT&T officials will agree to any Net Neutrality provisions.

 

However, Lindner as well as other AT&T executives believe the FCC commissioners will still get to vote on the deal by the Nov. 3 meeting.

 

“As all of you know, there aren't really any competitive issues associated with this merger.  We're seeing strong and increasing competition across just about every segment of the market we participate in.

 

"We would like to get the deal done. And in trying to expedite the approval, we've made some proposals that I think are very pro-competitive and pro-consumer. And hopfullly we look forward to getting this deal done on Nov. 3,” he said during the Q&A session.

 

It’s no wonder AT&T wants to get moving on the BellSouth deal, which will enable it to fold Cingular Wireless under a single corporate wing. In the quarter, Cingular’s net subscriber count grew by 1.4 million to reach 58.7 million subscribers, an increase of 6.4 million over the past four quarters. Cingular announced on Oct. 3, that it has completed integration of AT&T Wireless into a single nationwide GSM network. In addition, it continues to make progress deploying its UMTS/HSDPA network and expects to have 3G service in most of the top markets by the end of this year.

 

The company has also been achieving cost synergies by migrating traffic onto its own network, off of third-party vendors like Level 3 Communications’ (News - Alert) WilTel subsidiary – a move that Level 3 officials acknowledged in its strategy to shift away from the backhaul business and diversify revenue through acquisitions.

 

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Robert Liu is Executive Editor at TMCnet. Previously, he was Executive Editor at Jupitermedia and has also written for CNN, A&E, Dow Jones and Bloomberg. For more articles, please visit Robert Liu's columnist page.