ATLANTA (AP) — Cingular Wireless agreed to pay nearly $41

billion to buy AT&T Wireless Services to create the

nation’s largest mobile phone company, raising concern among

consumer advocates that it may hurt competition and impede lower

prices.

The deal announced yesterday between the second and third

largest U.S. wireless companies would create a cellular giant with

46 million subscribers and 70,000 employees. Current market leader

Verizon Wireless has 37.5 million customers.

The deal — subject to approval by AT&T Wireless

shareholders and federal regulators — would be a boon for

Atlanta-based Cingular’s efforts to cut costs, fill service

gaps and expand its spectrum, or radio frequency, in several key

U.S markets, thus enabling it to offer wireless Internet access at

broadband speed.

“This combination is expected to create customer benefits

and growth prospects neither company could have achieved on its

own, and will mean better coverage, improved reliability, enhanced

call quality and a wide array of new and innovative

services,” said Stan Sigman, president and chief executive of

Cingular, who will continue to lead the company.

Some fear the merger could reduce the fierce competition that

has driven down prices in the U.S. cellular market, trimming the

number of national players from six to five.

“Losing a competitor in this kind of market hurts

consumers, especially when you’re merging the big

players,” said Mark Cooper, director of research at the

Washington-based Consumer Federation of America. “It’s

not five and six that’s merging. It’s two and three,

and that’s a much bigger impact on competition.”

Guzman and Co. analyst Patrick Comack said he doesn’t

expect prices to go up if the deal is approved. “You still

have some very aggressive competitors out there,” he

said.

Cingular, a joint venture between SBC Communications Inc. of San

Antonio and BellSouth Corp. of Atlanta, said it will pay $15 cash

per share.