SBC's AT&T Purchase Likely A Call To Arms For Bell Phone Rivals; Verizon, BellSouth In Hot Seat; Fast-changing telecom field will see tougher competition for big-business customers.(INTERNET & TECHNOLOGY)

Byline: REINHARDT KRAUSE

SBC Communications Monday agreed to buy AT&T in a $16 billion deal that would make SBC a direct competitor of the other local Bells -- Verizon Communications, BellSouth and Qwest Communications -- for business customers.

While all the Bells seek lucrative business customers, they mostly confine those efforts to the regions their local phone services have long covered.

If regulators approve the AT&T deal, SBC will get the national business phone king. It will also get what's left of its former parent, its second helping of AT&T. Wireless firm Cingular, 60% owned by SBC, bought AT&T Wireless in October.

The landmark breakup of AT&T in 1984 created seven regional Bells. Today, there's just SBC, Verizon, BellSouth and, by virtue of its 2000 acquisition of US West, Qwest.

SBC will get AT&T's business division, which has a stellar list of corporate clients, and Ma Bell's ailing consumer unit.

How Verizon and BellSouth -- which owns the other 40% of Cingular -- respond will be key, analysts say. It's assumed they're looking at the other main long-distance providers, MCI and Sprint.