THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Friday, July 1, 1994 TAG: 9407010371
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY DAVE MAYFIELD, STAFF WRITER
LENGTH: Medium: 91 lines
More Americans will likely be using wireless communications devices sooner and more cheaply if the merger of Bell Atlantic Corp.'s and Nynex Corp.'s cellular phone operations goes through, executives of the two companies said Thursday.
Industry analysts and the two companies' own competitors seemed to agree.
The $13 billion combination of the Bell Atlantic-Nynex holdings, announced Thursday, is the first major alliance between two Baby Bells. It positions the as-yet-unnamed new enterprise to become a national player in the fast-growing wireless world.
``Our vision is very clear,'' Bell Atlantic Chairman Raymond W. Smith said during a news conference to announce the joint venture. ``Everybody in this country will have access to and ownership of a wireless connection to the superhighway.''
The planned merger of the Bell Atlantic-Nynex operations would not have an immediate impact on Hampton Roads. Neither Bell Atlantic nor Nynex has cellular services in the market, though Bell Atlantic is the dominant local ``land-line'' phone-service provider.
But several industry executives and analysts said they would expect the new entity to aggressively seek to fill in gaps in its current wireless territory, which covers all or large parts of 15 states along the Eastern Seaboard from Maine to South Carolina, as well as parts of Arizona, New Mexico and Texas.
Thursday's deal is actually one of a string of national gambits within the wireless industry going back to AT&T Corp.'s move a few years ago to buy McCaw Cellular Communications Inc., the nation's largest cellular provider. That deal is expected to be completed later this year.
In February, MCI Communications Corp. and Nextel Communications Corp. allied to create a national wireless system based on Nextel's mobile-radio business. Sprint Corp. has been rapidly expanding its cellular holdings with the intention of being a national player too.
The ``de-fragmenting'' of what has been largely a local and regional business should drive down the costs of wireless devices and services, said Berge Ayvazian, a telecommunications analyst for the Yankee Group, a Boston research company.
``As more and more companies set a national goal for themselves, it's bound to increase the efficiency and seamlessness of their networks,'' he said. Prices for wireless services should continue dropping and the quality of the services should go up, he said.
``It validates what we said earlier this year,'' said Kevin Inda, an MCI spokesman. ``This is going to be a growing, vibrant market that will attract a lot of players.''
Inda said Bell Atlantic's and Nynex's intentions to join the national scene will be good for consumers. ``Any time there's a good competitive environment, one with several strong service providers, it's got to be a benefit.''
Though cellular and other wireless services have been growing rapidly in popularity, only a fragment of the population uses them. Cellular, by far the most popular of the wireless platforms, has only 16 million subscribers, for instance - compared to more than 100 million residences with plain old phone service.
But Bell Atlantic's Smith predicted that wireless services will have a fivefold increase in use within the next 10 years.
One way Bell Atlantic-Nynex could plug gaps in its wireless service areas is to acquire licenses for a new wireless platform called Personal Communications Services. The Federal Communications Commission plans to start auctioning the first licenses for such services before year's end.
AT&T, MCI and most other major telecommunications companies said they intend to bid for the licenses and use them to augment the radio spectrum they already own for wireless services.
``A lot of people are going to be very competitive in going after PCS licenses,'' said Paula Carlin, mid-Atlantic region marketing manager for Sprint Cellular. ``It wouldn't surprise me if they tried to come in here,'' via the PCS route, Carlin said of Bell Atlantic-Nynex.
Sprint and Contel Cellular, a unit of GTE Corp., now control the cellular market in Hampton Roads. Nextel is the biggest player locally in mobile radio.
Though they said they wanted to strengthen their East Coast hold, Bell Atlantic and Nynex executives made it clear that they have national aspirations for their combined business, which with 1.8 million customers would rank fourth in the size in the cellular field.
The companies, whose joint-venture plan must be approved by federal regulators, said they will seek partners in the West to give their system a ``national footprint.'' ILLUSTRATION: AP COLOR PHOTO
Raymond Smith, left, chairman and CEO of Bell Atlantic, and William
Ferguson, chairman and CEO of Nynex, announce their merger plans at
a news conference Thursday in New York.
by CNB