Less Shelf Space Expected For Merged Cingular, AT&T

Atlanta — The merged Cingular-AT&T network will end up with fewer points of retail presence in coming months and less overall shelf space, analysts said. But the consolidation won't occur until after the holidays.

The merged entity, called Cingular Wireless, will close some overlapping carrier-owned stores, they explained. And retailers that sold both carriers' services will now be selling one less service, thus paring the shelf space they devote to the merged entity's products, added one analyst, Roger Entner, director of wireless mobile services for the Yankee Group. “The shelf space of the new Cingular won't equal the combined space of AT&T and the old Cingular,” he said. Retailers that sold both networks' services included Best Buy and Wireless Retail.

Cingular hasn't disclosed its store-closing plans, having completed the merger only in late October. It also hasn't given clues on its distribution policies toward the indirect channel, but In-Stat analyst Becky Diercks noted, “AT&T had strong business channels, and Cingular had strong consumer channels. I'm sure they'll keep some combination of the two to maintain the marketing to both business and consumer.”

Although it's not certain to what degree the merged entity will shift distribution directions, Entner gave one clue, contending that AT&T executives will take charge of Cingular's marketing and distribution. Under the direction of those executives, AT&T obtained the majority of its gross ads through direct channels, while the majority of Cingular net ads came through the indirect channels, analysts have said.

Before the merger, Cingular owned and operated 1,700 stores and kiosks and had about 8,000 indirect agents for a total of 88,000 outlets. About two-thirds of Cingular's agents operated Cingular-branded stores through a franchise-type arrangement and sold Cingular exclusively. AT&T sold through only 20,000 direct and indirect outlets.

On Nov. 14, all of the more than 1,000 AT&T-owned stores were re-branded with the Cingular name. Approximately 10,500 AT&T agent locations in coming moths were to get Cingular displays and phones.