When AT&T acquired BellSouth in 2006, AT&T also acquired BellSouth's 40 percent economic interest in AT&T Mobility LLC, formerly Cingular Wireless LLC. The remaining 60 percent of Mobility was owned by AT&T Inc. With the transfer of ownership of BellSouth's 40 percent stake in AT&T Mobility, a significant portion of BellSouth assets will be stripped away from debt investors. BellSouth bondholders will no longer have AT&T Mobility assets supporting BellSouth bonds.
"I'm not happy about it," said one BellSouth investor. "It makes BellSouth bonds the same as any other OpCo."
In December 2010, AT&T filed an application under the Universal Licensing System, under the FCC, requesting pro forma transfer of control of AWACS Inc and its wireless licenses from New South-western Bell Mobile Systems Inc to AT&T Teleholdings Inc. The filing has been consummated, according to the ULS website. "As part of an internal corporate restructuring that is planned for December 31, 2010, NSBMS will merge into AWACS, leaving Teleholdings as the direct parent of AWACS, which will be the surviving Entity," an attachment in the ULS application said. The ULS is the database and application filing system for most wireless radio services, according to the website.
Sources note that the ownership change allows AT&T to sell off BellSouth wireline assets, without concurrently any losing ownership of the wireless business previously under BellSouth's umbrella. A spokesperson for AT&T declined to comment.