Bell Atlantic, Vodafone Win FCC Backing for U.S. Joint Venture (followed by why I think this important)
Washington, March 30 (Bloomberg) -- Bell Atlantic Corp. and
Vodafone Airtouch Plc won Federal Communications Commission
approval for their U.S. wireless joint venture, creating the
country's largest mobile phone company with 21 million customers.
The FCC's decision is the final regulatory hurdle for the
combination, which will establish a nationwide network with almost
twice as many customers as AT&T Corp.'s wireless network, which
has more than 12.2 million customers.
Mobile phone companies are expanding their service areas
through acquisitions and joint ventures, cutting costs by keeping
more customers on their network and eliminating fees paid to other
companies for carrying phone calls. Bell Atlantic, the second-
largest U.S. local phone company, and Vodafone, the world's
largest wireless company, said they expect to save $7.4 billion
from lower costs and volume equipment purchases.
New York-based Bell Atlantic will control 55 percent and
manage the venture. Revenue is expected to be about $15 billion.
The Department of Justice approved the venture in December,
requiring the companies to sell overlapping operations in 15
states. That's because Bell Atlantic also is buying GTE Corp. for
$88 billion and will gain additional wireless assets through the
combination.
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Why is this important?
1. It is quite possible that Bell Atlantic would not publicize or pursue initiatives with Globalstar before this FCC approval because they did not want to do anything to raise other issues/concerns and potentially delay this approval. Now we may see Bell Atlantic step up to the plate as a major service provider. After their merger with GTE closes we should see them involved too.
2. Specifically, OnStar agreement with Bell Atlantic...We may finally see some Globalstar involvement now that the deal is done. In any case, if there was an unpublicized agreement, there is no longer any reason not to publicize it.
Regards, Dave |
