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Technology Stocks : Newbridge Networks -- Ignore unavailable to you. Want to Upgrade?

To: Tunica Albuginea who wrote (15488)	12/8/1999 1:48:00 PM
From: Tunica Albuginea	Respond to of 18016

From WSJ: USÿ Wireless Market heating up: December 8, 1999 ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Wireless Venture Puts Billions ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ In Assets on the Auction Block ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ By NICOLE HARRISÿ ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Staff Reporter of THE WALL STREET JOURNAL ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ The rapidly consolidating wireless industry is about to ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ see one of the biggest buying opportunities to date. ÿÿÿÿÿÿÿÿÿÿÿÿÿ Bell Atlantic Corp., GTE Corp. and Vodafone AirTouch ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ PLC said this week they will shed overlapping wireless ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ systems in order to win government approval for their ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ effort to create the U.S.'s largest wireless network. ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Systems in 96 markets, valued by analysts at $15 billion ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ to $20 billion, are on the block. ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ The result is an opening for wireless companies to beef ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ up quickly in an industry where size matters. It is also an ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ opportunity for new players to emerge, something not ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ entirely uncommon in the industry. Germany's ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Mannesmann AG, for example, expanded beyond its ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ roots as an old-line industrial concern to build a ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ wireless network in Europe -- and now finds itself the ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ target of the largest takeover offer in history, a $144.5 ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ billion bid from London-based Vodafone. ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Scope of Bell Atlantic Venture ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ The proposed joint venture in the U.S. combines Bell ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Atlantic's East Coast wireless properties with Vodafone ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ AirTouch's U.S. assets, most of which are west of the ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Mississippi River. But it also includes the wireless ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ assets of GTE, which operates throughout the U.S. The ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ markets include three million wireless customers ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ sprinkled across the country, including places such as ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ San Francisco, Chicago and Greenville, S.C. ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Bell Atlantic, which will control the nationwide ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ wireless network, can either sell all the overlapping ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ properties in one fell swoop or shed the assets ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ piecemeal. In some markets, the carrier must choose ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ between selling brand-new digital networks or older, ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ traditional cellular networks. The company has a tough ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ decision to make in Chicago, for example, where GTE ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ recently purchased wireless properties from Ameritech ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Corp. Bell Atlantic could choose to sell that cellular ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ network or a digital network it operates in the same ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ market. ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Buyers' Market ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ The proposed wireless joint venture among Bell Atlantic, Vodafone AirTouch and GTE will ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ need to shed overlapping units in some markets to clear regulatory scrutiny. Here's a look at a ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ few: ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ City ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Potential ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Subscribers ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Possible ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Purchaser ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ San Francisco ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ 6.7 millionÿ ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ AT&T ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Cincinnati, Dayton ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ 3.3 million ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Sprint ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Norfolk/Richmond, ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Va. ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ 2.9 million ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Sprint ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Jacksonville/Ft. ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Meyers/Pensacola, ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Fla. ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ 2.1 million ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Alltelÿ ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Source: WSJ Research ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ In any case, New York-based Bell Atlantic prefers to ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ "swap" the wireless properties with potential buyers. ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ "We might have a property that's attractive to a buyer that ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ wants to expand its coverage, and in return we could ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ acquire a market that could add to our network," said ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Brian Wood, a Bell Atlantic spokesman. ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Some of the nation's largest wireless carriers might find ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ a few of the markets appealing to fill in their coverage ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ gaps. AT&T Corp., for example, may be interested in ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ purchasing the San Francisco network. AT&T has been ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ jointly operating that system with the former AirTouch ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Communications Inc. since the late 1980s. ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ 'A Nice Fit for AT&T' ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Analysts said the carrier would benefit from outright ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ ownership. "The Bay area would be a nice fit for AT&T, ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ [which] wants to control its roaming costs and actively ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ sell Digital One Rate in that market," said Steven Yanis, ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ a wireless analyst at Banc of America Securities Inc. in ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ New York. AT&T officials declined to comment. ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Analysts also said Alltel Corp., a Little Rock, Ark., ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ telephone company that is the country's sixth-largest ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ wireless operator, might be interested in some of the ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ joint venture's wireless properties in the Southeast. ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Alltel serves five million wireless customers, primarily ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ in the Southeast and Midwest. An Alltel spokesman ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ declined to comment. ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ The properties also could be a boon for private equity ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ firms that manage leveraged buyouts. Firms such as ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Blackstone Group in New York, which bought stakes in ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ CommNet Cellular Inc. and Centennial Cellular Corp., ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ could be potential buyers. Blackstone declined to ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ comment. ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Still, the wireless properties could fetch bids from ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ buyers that don't own any wireless networks. "The whole ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ trend in the industry is to be national, and the big five ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ carriers are mostly formed up. These properties could ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ open up the industry to a host of nonhousehold names," ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ said John Bensche, a wireless analyst at Lehman ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Brothers Inc. ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ That was the case when Ameritech sold its Midwest ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ wireless properties to GTE for $3.27 billion as a ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ condition of Ameritech's merger with SBC ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Communications Inc. A little-known investment ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ company, Georgetown Partners, raised eyebrows in the ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ industry when it stepped in to buy a 7% stake in the ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ wireless properties. ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Write to Nicole Harris at nicole.harris@wsj.com