考博试题

There are six passages in this part. Each passage is followed by 5 questions or unfinished statements. For each of them there are four choices marked A, B, C and D Decide on the best choice and then mark your answer on the Answer Sheet.

Passage One

Nothing has become John Zeglis, chief executive of AT&T Wireless, quite as much as the decision to sell America’s third- biggest mobile-phone operator. A couple of months ago. The company’s shares were trading at below $7. valuing it at $18 billion, well below what it was worth when it was spun off from AT&T in 2001. But thanks to Mr Zeglis’s decision to put AT&T Wireless on the block a month ago, his shareholders will pick up around $15 a share following a fierce bidding war between Vodafone, the world’s biggest mobile-phone company by revenues, and Cingular, America’s number two operator. Cingular won early on Tuesday February 17th. Its parents, SBC Communications and BellSouth. have thus realised their ambition of doubling their mobile revenues, giving them an alternative to the flat revenues in their core fixed-line markets. But the victory over Vodafone, which reduces the number of nationwide players to five, is unlikely to lessen the fierce competition in the American mobile market. And the $41 billion or so paid may prove to be cripplingly extravagant.

Cingular already has plans for integrating AT&T Wireless. According to reports in the Wall Street Journal, Cingular will use its new acquisition to sell to the business market, though it will drop the brand, while Cingular itself concentrates o the consumer market. But AT&T Wireless is a weak business. It has made losses in half of the past ten quarters, and it has a seemingly

insatiable appetite for capital. Moreover, its operations are inefficient: it is currently

running two networks, an old one and a new one based on GSM, a more common global standard. Migration has not been as fast as expected, with just a fifth of customers using GSM. This means that Cingular will have to continue to bear the costs of running both networks, while forking out on marketing to speed up the transition.

Ironically, apart from AT&T Wireless, the other winners in the bidding war appear to be its losers. Shares in NTT DoCoMo rose last Friday after it became clear that the Japanese market leader would not be bidding. Vodafone shareholders seem similarly relieved that it has lost out. Its shares fell on Monday as stories emerged that it had raised its bid to $38 billion, and appeared poised to win. However, the shares jumped by more than 7% on Tuesday morning after Vodafone announced that it had dropped out of the bidding.

Quite apart from integrating AT&T Wireless and dealing with its numerous problems, if it had bought the firm Vodafone would have been forced by regulators to give up its 45% stake in Verizon Wireless, America’s leading mobile-phone operator. Whatever the

strategic rationale for the acquisition, analysts said it would have been a financial disaster for Vodafone at anything above $30 billion.