Bell Atlantic working on Soviet cellular-phone deal

February 08, 1991|By Leslie Cauley

Bell Atlantic Corp. said yesterday it will work with Belle Mead International Telephone Inc. USA of New Jersey to design, develop and operate a cellular-phone network in Moscow.

Terms of the Soviet deal, a first for Bell Atlantic, have yet to be worked out.

It could not be determined yesterday how large a role Bell Atlantic will play in the design and implementation of the new cellular network. It also was unclear how much, if anything, the deal will cost the Philadelphia-based company.

"I assume down the line there would be an investment" after definitive license agreements have been signed, said Michael Houghton, a Bell Atlantic spokesman.

The Belle Mead-Bell Atlantic consortium is one of two groups selected by the Soviet Ministry of Communications to provide cellular service in Moscow. The second group is headed by another Baby Bell, U S West Inc.

Mike Belhoff, a telephone analyst with Legg Mason Wood Walker in Baltimore, described the deal as a good strategic move for Bell Atlantic, which has been trying to expand its business overseas.

In some of those deals, which span the globe, Bell Atlantic has invested heavily. In other partnership arrangements, the company has acted more as an adviser.

"Conceivably, the payback could be great," Mr. Belhoff said. "It's a homestead rush across there [Eastern Europe], with tremendous opportunities for growth."

He noted that the success of any phone network in the Soviet Union -- mobile or otherwise -- would hinge on the government's willingness to vastly improve and encourage communication among its citizenry.

"There really has not been a desire before to make phones functional," Mr. Belhoff said. "They have a history of not encouraging people to talk."

Bell Atlantic acknowledged that the initial market for cellular services in Moscow probably will be limited.

Still, he said, Bell Atlantic believes it is important to be in the Soviet market early to capitalize on growth.

"We are confident the Soviet Union will work to get the goal of the free-market economy in there," Mr. Houghton said. "Once they do, there will be a real need for a type of system like that."

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