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AT&T to Buy BellSouth in Big Telecom-Industry Deal

I’m Steve Ember with the VOA Special English Economics Report.

A proposed deal announced this week could change the future of the telecommunications industry in the United States. It would make the biggest telephone company in America, AT&T, even bigger. AT&T plans to buy BellSouth, a major provider of local telephone service.

AT&T has offered to buy BellSouth for about sixty-seven thousand million dollars in stock. The combined company would have more than one hundred twenty thousand million dollars in yearly earnings.

The company formerly known as American Telephone and Telegraph controlled the United States market for phone service. That changed in nineteen eighty-four. A judge ordered AT&T to divide itself into competing businesses.

It was broken up to form seven companies to supply local telephone service in different areas of the country. An eighth part became a long-distance carrier. It kept the name AT&T.

Now AT&T plans to buy back one of its former pieces – BellSouth of Alabama. Directors of both companies have approved the merger deal. It must still be approved by shareholders of both companies and by federal officials.

AT&T plans to cut about ten thousand jobs after the deal is closed.

Some experts believe the government might be willing to approve the merger. The reason is that the telecommunications business has changed a lot in recent years. Now millions of people have wireless phone service and the Internet. And they have more choices. For example, some people buy telephone service from their cable television provider.

BellSouth's president says the merger will probably take about a year to complete. He says it will mean new services and more competition.

Some public interest groups are not so sure, though. They worry about higher prices if AT&T is permitted to grow again. But some experts say it might lead competitors to join forces to be in a better position to compete.

And now, to follow up a recent story:

Research in Motion has settled the dispute over the ownership of technologies for its BlackBerry wireless e-mail devices. The Canadian company announced the deal last Friday. That avoided a possible court order to shut down the popular service. Research in Motion agreed to pay NTP, a patent-holding company in Virginia, more than six hundred million dollars.

This VOA Special English Economics Report was written by Brianna Blake. Read and listen to our reports at I’m Steve Ember.