ATLANTA - As BellSouth Corp. prepares to be absorbed by AT&T Inc., it is still recovering from the hurricane damage to its equipment and disruption to its customer base along the Gulf Coast, Chief Executive Duane Ackerman told shareholders Monday.
The Atlanta-based company, the dominant local telephone provider in nine southeastern states including Louisiana and Mississippi, has estimated that the total cost of rebuilding its infrastructure and other related expenses will be about $700 million to $900 million.
Eight months after Hurricane Katrina, which destroyed 11 BellSouth central offices, downed 18,000 telephone poles and has caused 140,000 people to remain away from their homes, the company's recovery effort continues, Ackerman said at the company's annual meeting.
''During my most recent visit two weeks ago, I was struck by the destruction that still remains,'' Ackerman said.
The effort there, however, has not stood in the way of BellSouth's plans to expand its broadband network to allow higher speeds to better compete with cable providers and upgrade the network of its cell phone joint venture with AT&T, Cingular Wireless LLC.
''We truly stand at the beginning of a great new day for communications,'' Ackerman said. The gathering at a conference center on the edge of Atlanta could be BellSouth's last regularly scheduled meeting of shareholders if the AT&T deal is approved.
Shareholders will be asked to vote on the $67 billion deal, which was announced March 5, at a special meeting in July. No date has yet been set.
AT&T shareholders also must vote on the deal, and state and federal regulators must approve it as well. While Monday's meeting was not intended to address questions about the merger, several shareholders asked questions about the deal, including the impact on employee pensions, jobs and customer service.
While San Antonio-based AT&T has announced plans to cut up to 10,000 jobs if the deal goes through, mostly through normal turnover, Ackerman said the deal is good for customers and employees.
''Our cultures are a good fit, given the history and the vision of these two fine companies,'' Ackerman said. Ackerman also was asked about executive compensation and the tens of millions of dollars he stands to reap if the merger goes through.
''It is market based, and that's the bottom line,'' Ackerman said of his compensation. At the meeting, shareholders elected 11 directors to another one-year term and ratified the appointment of BellSouth's independent public accounting firm.
A shareholder proposal seeking more disclosure by the company of its political contributions was rejected. A similar proposal also was rejected at last year's annual meeting.