US telco AT&T Inc. looks to have headed off strike action by more than 11,000 workers following a "tentative agreement" with the Communications Workers of America (CWA) and the International Brotherhood of Electrical Workers (IBEW).

An existing deal between the unions and AT&T was due to expire at the weekend amid concerns that staff might lose out on certain health benefits.

Had an agreement not been reached the unions were ready to take industrial action.

However, agreement was reached at the eleventh hour. As part of the deal, workers are to get annual pay rises over the next four years and increased pension contributions plus all-important safeguards on healthcare.

The deal still needs the approval of members but Ralph Maly, CWA VP, has already described the settlement as "fair and equitable".

Last month SBC Communications completed its $16bn merger with AT&T Corp, announced in January, to create an enlarged telco AT&T Inc. ®