(FORTUNE Magazine) – With 54% of the market between them, the new Cingular (30%) and Verizon Wireless (24%) are emerging as the monsters of the consolidating American cellphone market. So what's in store as Godzilla and King Kong square off?

For the Cingular/AT&T Wireless combination, size means newfound strength. "They'll have double the spectrum, double the cell towers, and double the capacity, with a very deep, broad footprint," says Atlanta-based telecom analyst Jeff Kagan. "The new company will now be able to give Verizon a run for the money in all their markets."

Most important, analysts say the merged whole could be greater than the sum of its uninspiring parts. The two networks are expected to mesh in a way that will help eliminate the dropped calls and spotty coverage that have bedeviled Cingular and AT&T Wireless. (Of course, it'll take more than a merger to fix the two companies' reputations for shoddy customer service.) And with 44 million subscribers, coverage in 49 states, and roaming to 120 countries, the new Cingular will easily be the biggest cellphone company in the country. That along with its GSM technology, the most widely used on the planet, should give it the throw weight to offer better services and lower prices.

"We will be the market leader from here on out with unsurpassed coverage," crows Ralph de la Vega, Cingular's chief operating officer. "We'll have less dropped calls and more reliability. On top of that, we will have sufficient spectrum to migrate to 3G," the high-speed wireless digital technology that has been the much touted--and equally elusive--holy grail for the industry.

That, needless to say, is the best-case scenario. The $41 billion deal won't close until the fourth quarter due to regulatory approvals. Until that point the companies will operate separately. Then will come the headaches of combining two staffs, two networks, and at least three billing services. One of the first casualties will be AT&T Wireless CEO John Zeglis, who plans to turn over the reins to Cingular CEO Stan Sigman. "The first synergy is we've got two CEOS, and we can compress that to one," says Zeglis. The bottom line: The new Cingular won't be fully formed until 2005.

While Cingular concentrates on melding two companies, Verizon and other competitors will work on stealing their customers--something that has become easier with the advent of number portability. "The world isn't going to stand still while AT&T and Cingular integrate," says Jane Zweig, a telecom analyst at the Shosteck Group. "While these guys get their act together, everyone may eat their lunch." Business customers, which account for half of AT&T's subscribers, are particularly likely to get picked off by Verizon, says Zweig, because it is offering broadband wireless service loved by mobile PC users.

Which is why Verizon seems to be reacting to the merger with a big yawn. "None of their claims so far are a reality," says Verizon Wireless spokesman Jim Gerace. "They don't have a product out there that even comes close to ours."

If Cingular and AT&T do combine smoothly, however, their network will be big, broad, and easily connectable to everywhere from Monterey to Milan. In time, says Andrew O'Neill, a telecom analyst at Sanford Bernstein, "they will come out a much stronger competitor." --Janet Guyon