Saturday January 16, 1:52 pm Eastern Time
AirTouch still sees possible Bell Atlantic link
By Jessica Hall
NEW YORK, Jan 16 (Reuters) - Wireless phone giant AirTouch Communications Inc. (NYSE:ATI - news), which agreed to be
bought by Britain's Vodafone Group Plc, said it still hopes to forge a national U.S. partnership with its previous suitor, Bell
Atlantic Corp. (NYSE:BEL - news).
AirTouch agreed late on Friday to be acquired by Vodafone for about $56 billion, ending two weeks of speculation over the fate of San Francisco-based
AirTouch, the world's largest independent wireless phone company.
The agreement with Vodafone was announced just hours after Bell Atlantic, the largest U.S. local phone company, dropped out of the bidding. Last week,
MCI WorldCom also ruled itself out after briefly considering a possible bid for AirTouch.
AirTouch Chairman Sam Ginn said on Saturday in a telephone interview he still aims to talk with Bell Atlantic about creating a coast-to-coast U.S. presence
or ''footprint.'' AirTouch and Bell Atlantic are currently partners in a joint venture called PrimeCo.
''We will sit down with Bell Atlantic and talk about creating a national footprint on a partnership basis (that) we could not create on a merger basis. We still
need a national footprint,'' Ginn said.
''The preferred option would be to negotiate a relationship with Bell Atlantic on a partnership basis because our assets fit like hand and glove. We could
still partner to create a national footprint,'' Ginn said.
Bell Atlantic declined to comment on any potential, future talks with AirTouch.
Bell Atlantic filed a lawsuit late on Friday against AirTouch, seeking to void certain clauses in their PrimeCo partnership that prevent the two from
competing, Bell Atlantic spokesman Jim Gerace said on Saturday. The lawsuit was filed in San Francisco Federal District Court.
Bell Atlantic, which plans to buy Irving, Texas-based GTE Corp (NYSE:GTE - news), wants to eliminate the so-called ''non-compete'' clause in the
PrimeCo partnership agreement so the combined Bell Atlantic-GTE can compete against AirTouch in certain markets where they overlap, such as San
Francisco, Gerace said.
Ginn declined to comment on the lawsuit, since he said he had not read it.
Bell Atlantic had wanted to buy San Francisco-based AirTouch for its West Coast presence, which would have allowed the New York-based Baby Bell to
break out of its confined East Coast market that is dwarfed by national players such as AT&T Corp (NYSE:T - news) and Sprint PCS (NYSE:PCS - news).
But Ginn said the proposal from Vodafone offered more dynamic international growth opportunities than AirTouch would have had with Bell Atlantic.
''The Bell Atlantic proposal was solving a domestic issue that needed to be solved. With them, we would have been more of a U.S.-centric company. With
Vodafone our priorities will be global,'' Ginn said.
There were several reasons AirTouch chose Vodafone, including price, Ginn said. Bell Atlantic reportedly offered about $45 billion for AirTouch,
according to press reports.
''But the most compelling reasons were strategic reasons. With Vodafone, we have the opportunity to grow an international wireless company and position
ourselves as the largest in the world,'' Ginn said.
AirTouch's international networks and its strength in southern Europe will mesh well with Vodafone's northern European network. AirTouch will also give
Vodafone a foothold in the United States, a market it had previously shied away from.
''We will establish an incredible European network, with our only overlap being in Germany. We can combine our purchasing power, ... set up distribution
networks ... and have the technical capability and resources to expand in Asia, Latin America and elsewhere,'' Ginn said.
AirTouch, which has partnerships with both Vodafone and AirTouch, had spoken with both companies from time to time about joining forces. The takeover
talks, however, only accelerated in the past few weeks, he said.
Vodafone said it had wanted to buy AirTouch's international assets about 18 months ago, but recently became interested in buying the entire company.
Ginn said it never made sense to break up AirTouch and sell the international and U.S. assets separately.
''We don't think we can be a global player without having a presence in the U.S. Separating our company in that way made no sense for us. The industry is
globalizing,'' Ginn said.
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