TCI to Sell Sprint PCS Stake; U.S. OKs Merger With AT
AT&T; Corp.'s planned acquisition of Tele-Communications Inc. won approval from federal antitrust enforcers Wednesday after the companies agreed to sell TCI’s stake in Sprint PCS, a wireless telephone venture.
To resolve competitive concerns about pairing the nation’s largest provider of wireless and long-distance phone service with the second-largest cable operator, the Justice Department required that TCI sell its 23.5% stake in Sprint PCS. That venture is jointly owned by Sprint Corp., TCI and other cable companies.
The divestiture of Sprint PCS, which analysts and investors had anticipated, should further the trend toward lower prices and increased competition among mobile providers, said Assistant Atty. Gen. Joel I. Klein.
The sale of Sprint PCS also could help clear the way for the Federal Communications Commission--which has said it will finish its review of the combination early in 1999--to approve the acquisition.
Several regional phone companies and others, such as America Online Inc., want the FCC to force AT&T-TCI; to give rivals open access to new high-speed communications networks as a condition for approval.
AT&T; issued a statement for itself and TCI saying the Justice Department’s approval brings them “one step closer to finalizing a transaction that will ultimately give residential customers broader choices for local telephone service and other advanced services.”
AT&T; had promised to upgrade TCI’s cable systems to provide local phone service if the deal went through.
Shares of New York-based AT&T; fell $2.19 to close at $76.81 on the NYSE, while shares of Englewood, Colo.-based TCI fell 19 cents to $55 on Nasdaq.