Google Beat to the Punch by AT and T/Cingular?

Eric Schmidt of Google has been advocating a day when advertisement would make cell phone subscriptions free. It's natural with the popularity of Google's AdSense program, that the company should take over the lead. Endgadget: Google Chief Sez:"Your Mobile Phone Should be Free.

Every day on the Internet, we are bombarded by advertisement. Does that mean our Internet is free? Even NetZero, who used to be free, funding dial up on the backs of advertisers, charge for the privilege now.

Has AT and T beaten Google to the punch? Or is there another partnership in the works?

NEW YORK ( Reuters) - AT and T Inc. (T.N) plans to push new wireless services and make advertising a key revenue stream following its $86 billion acquisition of BellSouth Corp. (BLS.N), The Wall Street Journal reported on Tuesday.

The acquisition, which closed last week, gives AT and T control of mobile phone service provider Cingular Wireless. The companies previously ran Cingular in a joint venture.

``The biggest asset we bought here was Cingular,'' AT and T Chairman and Chief Executive Edward Whitacre said, according to the Journal. ``We're about to become a company with wireless at its heart.''

AT and T will begin selling wireless service under its own brand name to its pool of corporate phone and Internet customers, the Journal reported. Control of Cingular will allow it to offer discounts for bundles that were impossible when the wireless carrier was a separate entity, the paper reported.

Consumers will get the choice of signing up for a new package of mobile phone and Internet service rather than the traditional bundle of land-line phone and Internet service, the paper also reported.

AT&T has been testing cellphones that can run on Wi-Fi networks when at home, which could let consumers save money on their mobile phone bills and perhaps get better reception indoors, the paper said.

It also reported that AT and T will begin selling advertising on mobile phones, television and Internet access service this year.

Advertisers will be able to buy spots for TV and broadband beginning early this year, with wireless ads following later this year, the Journal said. The advertising business could generate several billion dollars in revenue per year in the next five years, the paper cited the company as saying.