USA Digital Radio set for merger

Columbia company to join Lucent Digital

Communications

July 13, 2000|By Stacey Hirsh | Stacey Hirsh,SUN STAFF

In a move expected to help push radio into the digital age, Columbia-based USA Digital Radio Inc. and New Jersey's Lucent Digital Radio unit announced yesterday that the two have agreed to merge.

The two companies - both of which develop digital technology for manufacturers of radio equipment - will become iBiquity Digital Corp.

The companies called the combination a "merger of equals," though specific financial terms weren't disclosed. Lucent Technologies Inc., Lucent Digital Radio's parent, will be the venture's biggest investor, followed by Viacom Inc., one of 30 companies backing USA Digital.

A shift from analog to digital will mean a host of new wireless data applications, such as stock quotes and Internet access, through radio and better sound quality, said Robert Struble, who will become iBiquity's chief executive.

"This is like listening to CDs in your living room," he said, "but you're in your car driving 60 miles per hour."

Struble, president and CEO of USA Digital Radio, and Suren Pai, president and chief executive of Lucent Digital Radio in Warren, N.J., will become co-chairmen of the board for iBiquity. The new company will maintain two headquarters, one in Columbia and the other in Warren.

The merger is expected to create jobs at the new company. USA Digital Radio has 46 employees at its Columbia office, and Lucent has 38 in New Jersey.

"We expect to be hiring very soon after the merger is closed," Struble said.

Struble said the technology allows broadcasters to improve their products while making a defensive move against competitors, such as Internet radio.

Struble said stations in New Jersey and this area, including WHFS-FM, are using the two companies' digital technology, but the merger will allow the companies to further develop and commercialize their products.

"This is an announcement that's been eagerly awaited by the radio industry for some time because it pretty much clears the way for bringing the next generation of radio to consumers," said Dennis Wharton, a spokesman for the National Association of Broadcasters. "Consumers and radio listeners can expect higher quality sound and also new products and new services as a result of this announcement."

Bloomberg News contributed to this article.

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