MCI WorldCom, Without AirTouch, May Still Pursue Wireless
By Craig Karmin
NEW YORK (Dow Jones)--MCI WorldCom Inc.'s (WCOM) announcement late Friday that it will not bid on AirTouch Communications Inc. (ATI) doesn't mean that the telecom giant won't soon pursue other options for wireless service.
"After reviewing the possibility of a combination with AirTouch
Communications, MCI WorldCom has determined not to pursue a bid for company at
this time," said a MCI WorldCom spokesman in a statement.
"We will continue to explore opportunities that best address the interests of
MCI WorldCom customers and shreholders,"the statement concluded.
Industry observers have noted that MCI WorldCom chief executive Bernie Ebbers
-- whose company has made more than 50 acquistions in the past 10 years -- has
been unethusiastic about the wireless industry.
But the company's acknowledgement that it considered a deal seemed to suggest
a thaw in his resistance. This may be especially true now that WorldCom owns
MCI, which added millions of retail consuemrs to the acquirer's mostly business
customer base.
"He has said that wireless is not yet a strategic enough part of the package
for their core customers," said Mel Marten, an analyst with Edward Jones. "That
is probably changing, but AirTouch was not the best way to go about it."
Despite a price tag that might have cost more than $50 billion, AirTouch
would have brought only a regional wireless footprint, leaving MCI WorldCom at
a disadvantage to the national prescence of AT&T Corp. (T) and Sprint PCS
(PCS), analysts noted.
Still, they said the market should not rule out persistent speculation that
MCI WorldCom could acquire Nextel Communications Inc. (NXTL), the last
remaining major independent wireless carrier besides AirTouch.
MCI WorldCom's formal withdrawl from the process leaves Bell Atlantic Corp.
(BEL) and the U.K.'s Vodafone Group Plc. (VOD) still with offers on the table
for AirTouch.
Market participants said that an announcement by AirTouch could come as early
as Monday.
- By Craig Karmin; 201-938-2020
-craig.karmin@cor.dowjones.com
(END) DOW JONES NEWS 01-08-99
05:05 PM
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