Wireless Merger Coupled to Divestiture
The Justice Department late Monday approved Bell Atlantic’s wireless partnership with Vodafone AirTouch and its merger with GTE Corp., after forcing the telephone companies to agree to sell wireless businesses in 96 markets in 15 states.
The proposed divestiture is likely the largest sell-off ever required by the government in approving a corporate merger, the Justice Department said in a statement.
The government’s approval will allow creation of a coast-to-coast wireless telephone network by combining the nation’s third-, fourth- and fifth-largest companies in the wireless business.
The divestitures include the major metropolitan areas of San Diego, San Francisco, Cleveland, Phoenix, Seattle and Cincinnati. The government would not make public the value of the divestiture because the properties have not yet been sold.
In addition to providing local telephone service in 13 states and the District of Columbia, Bell Atlantic, based in New York, is the nation’s fourth-largest wireless phone service provider with 7.5 million subscribers nationally.
Vodafone, based in Britain, is the world’s largest mobile telecommunications company. It has mobile operations in 24 countries on five continents, with more than 28 million customers. In this country, Vodafone is the third-largest wireless telephone service provider with about 9.1 million subscribers in 25 states.
GTE, based in Irving, Texas, provides local telephone service in 28 states and wireless telephone service in 17 states. It is the fifth-largest wireless telephone service provider, with about 6.9 million subscribers nationwide.
The government said the new settlement agreement would ensure that the national wireless network will not increase wireless concentration in any region. The government said the original merger and partnership would have eliminated head-to-head competition in wireless telephone service in the 96 markets.
“Wireless mobile telephones are increasingly becoming an important part of everyday life for an ever-growing number of Americans. It is important . . . we retain competitive choices for consumers so that they get the lowest prices as well as features and rate plans that best fit their needs,” said Assistant Atty. Gen. Joel I. Klein.
