In the passion-ridden and hard-to-measure world of Wall Street mergers and acquisitions (M&A), it's hard to escape the winner's curse -- discovering that the object of your desire isn't worth nearly as much as you paid for it. After the pre-announcement of AT&T Wireless' (NYSE:AWE) first-quarter results yesterday, this should hit home for SBC Communications (NYSE:SBC) and BellSouth (NYSE:BLS) investors. The figures say it all: SBC and BellSouth's joint wireless venture, Cingular, bid way too much for AT&T Wireless.

AT&T Wireless' results were downright dismal. Revenues were roughly flat versus the prior year's first quarter, but down 11% sequentially. It lost a staggering 367,000 customers in the period, versus the 257,000 customers it added in last year's first quarter. At that defection rate, it's going to be awfully tough for AT&T Wireless to come up with the 675,000 net subscriber additions forecast for year-end 2004 by Lehman Brothers, the financial advisor for Cingular on the AT&T Wireless acquisition.

AT&T Wireless blamed the lousy results on problems with its IT systems and new FCC mobile number portability rules that let subscribers switch wireless providers more easily.

Indeed, the company's networks and databases are a mess. (To get a sense of the scale of the systems disarray, check out the article "AT&T Wireless Self Destructs" in this month's issue of CIO magazine.) Integration of AT&T Wireless' network and systems could become a costly drain for Cingular parents SBC and BellSouth.

Of course, Cingular wants AT&T Wireless badly. The deal gives it a foothold in the corporate mobile market and pairs well with its consumer focus. Cingular also needs more wireless spectrum to expand its high-speed Internet services and improve call quality. But now it looks suspiciously like SBC and BellSouth are willing to pay anything to offset slowing business.

Back in February, after a bidding war with Vodafone (NYSE:VOD), Cingular agreed to buy AT&T Wireless for $41 billion in cash, almost twice the market value placed on the firm just a month earlier. At the time, that price translated to an astounding $2,100 per AT&T Wireless customer. With every new subscriber loss, that king's ransom climbs even higher.

Don't be swayed by reassurances from Cingular executives that they expected AT&T Wireless' disappointing results. That doesn't change the results, and it doesn't take way from the fact that SBC and BellSouth investors are getting a raw deal. Today's AT&T Wireless share price represents a 10% discount to the $15 offered by Cingular. Once investors start digesting yesterday's results, don't be surprised if the spread widens.

What's your opinion about AT&T Wireless? Did Cingular pay too much? Talk about it on the AT&T Wireless discussion board.

Fool contributor Ben McClure hails from the Great White North. Ben doesn't own any shares mentioned here.