Bell Atlantic, Nynex complete cellular merger

July 01, 1995|By Michael Dresser | Michael Dresser,Sun Staff Writer

As Bell Atlantic Mobile and Nynex Wireless consummated their long-planned merger today, their cellular telephone customers were in line to catch a few bouquets.

Cellular industry analysts say the merger of the two subsidiaries of regional Bell companies will set off a new flurry of price competition in the fiercely contested Washington-Boston corridor.

First announced on June 30, 1994, the merger was completed at 12:01 a.m. today.

Gary N. Schulman, regional vice president for Bell Atlantic Mobile in Baltimore-Washington, said the new Bell Atlantic Nynex Mobile will soon have an announcement of moves with a "positive impact" on its customers.

Mr. Schulman would not discuss details, but Bell Atlantic Nynex spokesman Jim Gerace indicated that the July 10 announcement would involve significant cuts in the extra costs for "roaming" -- making calls when traveling outside the customer's home territory.

Asked whether the announcement would also bring other price cuts, he would say only that "there could be."

Herschel Shosteck, a Silver Spring-based market economist who tracks the wireless market, said roaming costs are an important source of revenue for cellular companies, but also a severe deterrent to customers' use of wireless telephones when traveling.

According to Mr. Shosteck, cellular companies that drop their roaming rates will experience a short-term revenue drop but will quickly make up for it in increased calling volume. Under current rates, a Bell Atlantic customer in Baltimore who takes a cellular phone to Boston or Chicago will be charged $3 a day for the first call and 99 cents for each minute. Calls back to Baltimore incur extra long-distance charges.

Elliott Hamilton, director of U.S. wireless consulting for EMCI Inc. in Washington, says that's about to change.

He said Bell Atlantic, which already serves most of the mid-Atlantic, likely will move to establish a broader Northeast regional market with attractive prices. The merger with Nynex, which serves markets in New York and New England, will let it do so.

Another cellular industry authority who is expecting a cut in roaming charges is Steve Sitton, president of Cellular One Washington/Baltimore, Bell Atlantic's bitter regional rival.

Mr. Sitton said his company did away with the daily roaming fee in most markets a year and a half ago and now charges 50 cents a minute for roaming in Boston, Chicago, New York or Philadelphia.

Bell Atlantic Mobile's roaming charge in New York and Philadelphia is 75 cents a minute, with no daily fee.

The Cellular One executive said he expects his competitor to drop most daily charges because of customer sentiments. "They really hate these daily rates. I'm really surprised Bell Atlantic hasn't removed those earlier," he said.

Mr. Sitton said Cellular One Washington/Baltimore, a subsidiary

of Southwestern Bell Mobile Systems, is preparing a competitive response to the anticipated Bell Atlantic-Nynex announcement, including an expansion of its local calling area.

Mr. Shosteck said such moves reflect a growing realization in the cellular industry that the carriers have to cut prices to stave off the coming onslaught of "personal communications services" (PCS), a technology similar to cellular.

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