Standard and Poor's has downgraded its rating of AT&T to 'sell', following the US telecom firm's proposed $67bn acquisition of BellSouth. The credit rating agency says the deal has its merits - but AT&T is paying too much.

S&P analyst Todd Rosenbluth also thinks that the "regulatory approval process will be lengthy given the size of the deal… In addition, AT&T is still in the early stages of integrating two large acquisitions that we think will pressure its margins".

Still, AT&T has given an early indication of how it intends to cut costs. It aims to cut 10,000 jobs post-merger, according to wire reports. ®

Related stories

• FCC pulls AT&T-BellSouth merger vote (again) (13 October 2006)
• DoJ waves through AT&T-Bell South deal (11 October 2006)
• Comment Should AT&T have to divest its broadband wireless holdings? (11 April 2006)
• AT&T back together again (6 March 2006)
• AT&T boss warns on bandwidth (31 January 2006)
• BellSouth Q4 disappoints (25 January 2005)