AirTouch, Vodafone Still Busy
AirTouch Communications and new merger partner Vodafone Group will immediately pursue a wireless phone partnership with losing bidder Bell Atlantic, a move that would help the companies expand their U.S. reach, AirTouch Chief Executive Sam Ginn said Saturday.
Such an arrangement would solve a critical problem for AirTouch--the need to provide nationwide service to mobile customers. AirTouch serves customers primarily on the West Coast of the United States and overseas, while Britain’s Vodafone provides service in England and other European countries. Combined, the two firms serve more than 27 million paging and mobile phone customers worldwide.
San Francisco-based AirTouch agreed late Friday to be bought by Vodafone for an estimated $56 billion in cash and stock. The deal was struck after the New York phone company Bell Atlantic dropped out of the bidding for AirTouch.
A spokesman for Bell Atlantic declined to comment on any potential partnership between the companies. “I don’t think our executives have discussed that with AirTouch,” said Bell Atlantic spokesman Jim Gerace.
Bell Atlantic and AirTouch are already partners in PrimeCo, an independent U.S. wireless carrier. However, relations between AirTouch and Bell Atlantic appeared to sour Friday when after withdrawing from the bidding war, Bell Atlantic filed a lawsuit against AirTouch over a non-compete clause contained in the PrimeCo agreement.
“I’m hoping that rather than ending up in the courthouse, that we can end up solving each others’ problem,” Ginn said.
“The lawsuit doesn’t strike a conciliatory note,” said Bob Egan, research director for wireless at the Gartner Group in Stamford, Conn. “But it is in the interest of both of them to come up with some arrangement. [AirTouch] needs Bell Atlantic and vice versa.”
The Vodafone purchase, which is subject to regulatory and shareholder approvals, still would leave the combined company short of the nationwide service it needs to cheaply and easily accommodate customers using their phones in both Los Angeles and New York, for example.
Without that kind of nationwide coverage, Bell Atlantic, AirTouch and others could face an exodus of some of their most valuable customers--frequent travelers. Many of those big spenders are already switching to AT&T; Wireless and Sprint PCS, which offer national service without the expensive roaming and long-distance charges.
“I would hope that now that a decision has been made on the merger, that we could sit down with Bell Atlantic and see what we can do to arrive at an operating arrangement so that we could . . . have reciprocal roaming arrangements and operate in a way that the customer would not know that they are moving from one territory to the other,” Ginn said. “We’re open to solutions.”
