For the fourth quarter, the San Antonio, Texas-based carrier posted a 17.1% rise in profits to $1.99bn from $1.65bn in the year-ago quarter. Sales rose 23.1% during the last three months of 2006 to $15.89bn from $12.91bn 12 months ago.

These rises were mostly attributed to the purchase of the old AT&T Corp, for $16bn back in November 2005. Indeed, for the fourth quarter AT&T only included two days of results from BellSouth and Cingular.

Meanwhile, Atlanta-based BellSouth saw its fourth-quarter net income rise 29.3% to $1.2bn on sales up 4.6% at $9.1bn.

The current AT&T is actually the former baby bell known as SBC Communications Inc, which was the largest local phone outfit after Verizon Communications Inc in the US. SBC was spun out of the old AT&T back in 1984. However in the past two years SBC/AT&T underwent a rapid transformation.

Soon after its acquisition of AT&T (otherwise known as Ma Bell), the then SBC said it would adopt the AT&T name to ensure the iconic name of AT&T, one of the oldest brand names in US business, would not disappear from the telecoms landscape.

In March 2006, the newly named AT&T Inc (SBC) triggered another seismic shift in the US telecommunications landscape when it said it would acquire the third-largest US telecoms group, BellSouth Corp, in a deal worth a very hefty $86bn. More importantly, the key driver of the acquisition was BellSouth’s 40% stake in their joint wireless venture Cingular Wireless LLC, which become the number one mobile operator in the US after it acquired AT&T Wireless back in 2004.

When the acquisition of BellSouth finally approved on December 29, 2006, AT&T now has the ability to promote a unified brand, and indeed has said that Cingular will adopt the AT&T name. The BellSouth deal has also given the combined entity the ability to reduce overlap and expenses, especially important given the problems posed by the fixed-line operators in the US from VoIP and cable operators.

It expects synergies from the BellSouth merger to total $800m to $1.2bn in 2007, up from an earlier forecast of $500m to $800m. For 2008 and 2009, AT&T raised its synergy estimate to around $22bn, up from a previous estimate of $18bn.

AT&T is building a fast fiber network to offer video in an effort to nullify the cable challenge.

AT&T’s Wireline (fixed-line) division posted segment income up 97.8% to $8.35bn for the full year, while operating revenues rose 48% to $58.47bn. AT&T said it saw strong regional business growth, which rose 7.5% during the fourth quarter, with good growth in data revenues and strong demand from the small to medium business sector.

But it was the Wireless (Cingular) side, which continues to be the principle growth engine. Wireless posted yearly segment income up to $3.242bn from $531m, while operating revenues rose 8.9% to $37.506bn.

San Antonio-based AT&T gained full control of Cingular late last year when it bought Atlanta-based BellSouth Corp., its partner in the wireless venture. It is eliminating the Cingular brand over the course of the year so it can offer both wireless and landline service under the AT&T name.

Cingular solidified its leadership in the US mobile space after adding 2.4 million new customers, giving it a total customer base of 61 million with stable churn.

Earlier this week, Cingular posted its last earnings as a stand-alone company. Net income had rose to $782m from $204m a year earlier. Sales were up 10.2% at $9.8bn.

AT&T’s Directory division meanwhile saw a 3.4% decline in segment income to $1.922bn, while operating revenues declined 0.3% to $3.702bn.

For the full year ending December 31, the overall group saw a staggering 53.7% to $7.356bn from $4.786bn in fiscal 2005. Sales rose 44.1% to $63.055bn from $43.764bn the previous year.

Shares in the carrier rose 0.81% to $36.92 on the New York Stock Exchange on Thursday.