Cellular firms plan nationwide network

October 21, 1994|By Michael Dresser | Michael Dresser,Sun Staff Correspondent

WASHINGTON -- Four telecommunications companies with large regional cellular holdings came together yesterday in an East Coast-West Coast alliance designed to gobble up enough wireless telephone licenses in the heartland to create a "seamless" national network.

Bell Atlantic Corp. and Nynex Corp., which announced in June that they would merge their cellular telephone holdings, will form a common venture with U S West Inc. and AirTouch Communications, which unveiled a somewhat looser partnership in July.

The venture, representing territories with a combined population more than 100 million people, will pool the four companies' considerable resources to bid on new wireless communications licenses that the the Federal Communication Commission will auction, starting Oct. 28.

The aim is to combine the PCS licenses with their existing cellular properties to create a single national wireless brand, said Larry Babbio, chief operating officer of Bell Atlantic. The companies have not yet chosen that brand name, he said.

The alliance brings together financial heavyweights with combined 1993 wireless revenues of $2.5 billion to bid against AT&T Corp., which has just absorbed McCaw Cellular Communications Inc., with 2.3 million customers. Together, the four companies in the alliance boast 4 million cellular customers.

Yesterday's announcement also signals the apparent failure of talks aimed at bringing MCI Communications Corp. into an alliance with the merged Bell Atlantic-Nynex operation. Executives representing the four companies at a new conference didn't rule out bringing in other partners before the -- auctions, but seemed ready to stand pat.

"We still are continuing to talk with various different partners but we feel we have the critical mass to go it alone," said Fred Salerno, Nynex vice chairman for finance and business development.

Bell Atlantic Mobile and Nynex Mobile are the fast-growing wireless arms of the regional Bell companies serving the mid-Atlantic and Northeast, respectively.

U S West is the regional Bell that serves a territory stretching from Minnesota through the Rocky Mountain states to the Pacific Northwest. AirTouch, the former cellular unit of Pacific Telesis, brings the lucrative California market into the venture.

Mr. Babbio said he expect the alliance to be one of "maybe five large entities" trying to put together a national network by bidding in the FCC's auction.

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