AT&T; Will Offer Wireless, Paging to Customers

AT&T; Corp. said Monday that it will offer cellular and paging services to its long-distance customers in its first major wireless expansion since it acquired McCaw Cellular Communications Inc. last September.

The move could turn AT&T;’s 90 million customers into wireless users as well, significantly strengthening McCaw’s position as the nation’s largest provider of mobile telephones.

Beginning Sept. 18, AT&T; will offer its long-distance customers cellular phones for $1, with three months of free evening and weekend air time, plus discounts on cellular long-distance calls.

Those who choose AT&T; for their cellular and home long-distance services can receive a 25% discount on the cellular calls.

McCaw, which operates under the Cellular One brand name, will also provide a pager with unlimited local messaging and the first month of service free.

“AT&T; is offering customers the first of many benefits it envisioned when it acquired McCaw for $11.5 billion in September, 1994,” the company said in a statement.

Industry analysts say AT&T; will gain huge benefits in identifying potential new users of mobile phones and retaining the loyalty of its existing long-distance users in a more efficient marketing structure.

“This will definitely stimulate demand and accomplish all their marketing desires,” said analyst Michael Elling of Prudential Research. “As they can target their high-usage long-distance customers, AT&T; could reduce their churn [loss of customers to long-distance competitors] fairly dramatically.”

One condition of approval for AT&T; to buy McCaw was to bar nationally advertised cellular services under AT&T;’s own name until 60% of McCaw’s customers had been offered a choice of long-distance companies for connecting cellular calls.

The McCaw subsidiary will be renamed AT&T; Wireless Services on Aug. 28, when that 60% requirement has been met.

Under the requirement, McCaw will offer a choice of Sprint, AT&T;, MCI Communications and other providers for connecting any long-distance calls made from or received on a customer’s cellular phone. The idea is to ensure that McCaw does not favor its parent company in routing calls.

AT&T; will launch its offer in 14 cities where McCaw operates and where the long-distance election process has been completed. They are Boise, Ida; Denver; Jacksonville, Fla.; Las Vegas; Miami; Minneapolis-St. Paul; New York; Orlando, Fla.; Pittsburgh; Portland, Ore.; Sacramento; Salt Lake City; Seattle, and Tampa, Fla. The services are expected to be available by the end of the year in Dallas-Ft. Worth; Little Rock, Ark.; Oklahoma City, and Tulsa, Okla., as well as Austin and San Antonio in Texas, Shreveport, La., and Alaska.

McCaw’s license areas cover 35% of the U.S. population, but AT&T;’s coverage will be extended to 80% next year when its digital personal communications services network is launched. In PCS areas, AT&T; will offer a dual-mode phone that customers can continue using when they are traveling in other parts of the country.

Kirkland, Wash.-based McCaw has 5 million customers, more than any of its competitors. It has more than 10,000 employees throughout the United States.

AT&T; stock fell 87.5 cents to close at $52.75 on the New York Stock Exchange.