*Merger Completed, Business As Usual [on VOD]
From the July 5, 1999, issue of Wireless Week
By Peggy Albright
SAN FRANCISCO--The first thing Arun Sarin did when he arrived at work Wednesday morning, in keeping with his routine,
was turn on his computer to check the performance of
the various stocks he follows. The most familiar one of all, AirTouch Communications Inc., which has always appeared near the
top of the alphabetical list, was gone. Sarin found himself scrolling down the list to find the company's new name: Vodafone
AirTouch plc.
It's not as if Sarin, the rest of AirTouch or the wireless industry had not been expecting change. As president and CEO of the
U.S./Asia Pacific region and a member of the board of directors for Vodafone AirTouch, Sarin has been immersed in helping
bring the two companies together since their merger was first announced in January.
Now, however, reality was seeping into everyday routines. As of Wednesday, the San Francisco carrier is now, officially, a
regional arm of the world's largest mobile telecommunications company, and it also has become the first foreign-owned wireless
company in the United States. The sheer scale of the new enterprise, a $110 billion company now licensed in 24 countries, will
give the operator the resources and the clout to name its strategic intentions and then execute those plans. Except for its key
constituents, Sarin said, the San Francisco-based operations in many ways will not change.
"The core of this business around customers, employees, and shareowners is not going to change," Sarin said. "The AirTouch
you've known before and the AirTouch of the future is going to be the same."
Examples? The company will continue to maintain its customer service strategy, called superior service delivery, reflected in the
AirTouch Promise made to its customers this past spring. The previous AirTouch practice of offering employees opportunities
to become shareholders continues, though the former program, based on restricted stock offerings, has been converted to now
offer stock options to all 14,000 employees. Sarin was on Wall Street last week, assuring the investment community that the
synergies between Vodafone and AirTouch will drive growth.
As part of efforts to attract new segments to the market, Vodafone AirTouch will conduct a massive launch of a prepaid
program in the United States in next six months, offering both card-based plans and prepaid billing options that reduce prepaid
rates to near-post-paid levels.
The company will launch calling party pays programs as soon as billing and collection issues with local exchange carriers are
ironed out. It will offer more and bigger bundles of minutes. And it will launch wireless Internet services in a big way. Watch for
such services to begin appearing on a cellular phone during the third quarter of this year.
Despite the company's already gargantuan size, winning more licenses is a strategic objective and in the next two or three
months, the company will report some "very significant increases in stakes around the world," Sarin said. [More potential Globalstar subscribers....]
In Europe, the company is ready to exploit its vast reach, and will likely create a one-rate plan that would enable users to use a
single phone wherever they travel.
The company will "cross-pollinate" global system for mobile communications and code division multiple access technologies
wherever possible, "all the way to 3G." For starters, within the next six months, it will introduce a GSM/CDMA phone that will
enable users to travel in any of its international service areas.
The carrier also is determined to offer service on the East Coast, without which the global operator will remain only a regional
player in the country.
Despite a lawsuit against AirTouch over a non-compete clause, filed by Bell Atlantic Corp. after merger talks between the two
companies failed and AirTouch joined with Vodafone, Sarin and others at his company are lobbying Bell Atlantic heavily to
convince the latter carrier to partner with Vodafone AirTouch to become a powerhouse.
However, if it doesn't work out with Bell Atlantic, the Vodafone AirTouch strategy is to do whatever it takes to gain that
footprint. "That kind of strategy is enabled by a large company," Sarin said. The advantages of scale are benefits of
globalization in the wireless industry. This merger, he thinks, is just a beginning.
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