Cellular Phone Giants Unveil Joint Venture
Moving closer to a nationwide cellular network, McCaw Cellular Communications and PacTel Corp., two of the nation’s largest cellular operators, on Thursday unveiled plans for a joint cellular venture to operate in two sprawling territories with a population of 9.5 million.
The 99-year joint venture, with 50% ownership by each company, would combine the firms’ cellular properties in San Francisco, San Jose, Dallas and Kansas City, the announcement said.
“This venture allows PacTel to increase its coverage in the San Francisco Bay Area and to expand significantly in the Midwest,” said Lee Cox, president and chief executive of PacTel, a subsidiary of Pacific Telesis Group and the nation’s third-largest cellular operator. “Our company’s goal has been and continues to be the deployment of a seamless cellular network that spans North America,” said Craig McCaw, chairman of McCaw, the Kirkland, Wash., firm that is the nation’s largest cellular operator.
The deal solves what could have been a thorny problem for PacTel and McCaw in the San Francisco Bay Area, where they are already partners with Associated Communications Corp. of Pittsburgh in the Bay Area Cellular Telephone Company (BACTC).
Under an unusual arrangement between McCaw and PacTel, the right to serve more than 4.6 million subscribers in San Francisco and San Jose was scheduled for sale to either company Sept. 26. But it appeared that neither company wanted to buy the other out. The 50-50 venture was the solution.
Under terms of the pending deal, McCaw would contribute 5 million potential subscribers to the venture, while PacTel would add 4.5 million potential subscribers and pay McCaw $100 million in cash. BACTC would be part of the new venture, as well.