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To: S100 who wrote (101438)	7/8/2001 8:48:46 PM
From: S100	Respond to of 152472

AT&T unit faces fight on independence By Richard Waters in New York Published: July 8 2001 20:05GMT \| Last Updated: July 8 2001 20:10GMT Imagine running a US wireless company that cannot offer its most advanced service in the country's two largest cities, New York and Los Angeles. That is the prospect before John Zeglis, chairman and chief executive of AT&T Wireless, as his company is formally spun off as an independent entity on Monday. The separation, which creates a stand-alone company worth more than $40bn, comes more than a year after AT&T first secured a listing for a tracking stock tied to its mobile business. The full spin-off involves the distribution of AT&T's remaining 52 per cent stake in the company to its shareholders. Mr Zeglis' dilemma reflects two of the biggest problems that bedevil the US mobile communications industry: a lack of technology standardisation and an acute shortage of spectrum. At AT&T Wireless, those twin issues have combined to create a particular problem, and could help to propel an eventual merger with another wireless company. Under the terms of a deal this year with NTT DoCoMo, an alliance that was cemented with a $9.8bn investment by the Japanese company, AT&T Wireless will soon begin to launch a network based on GSM technology, running in parallel to its existing TDMA network. The GSM service is intended to act as a platform for the eventual launch of a high-speed network using wideband CDMA, the same third-generation technology that will be used in Europe and by DoCoMo in Japan. The shift to a de facto world standard, however, has its costs. "It's difficult to do and it's expensive," says Luiz Carvalho, wireless industry analyst at Morgan Stanley. AT&T Wireless, which has not disclosed the costs of its technology shift, says that it remains on course to launch its first GSM service in Seattle this summer, with 40 per cent of its markets covered by the end of the year. Even if it hits the technological deadlines, though, a shortage of spectrum has clouded the picture. The company has pledged to run its current TDMA network, as well as its existing low-speed, CDPD data service, for years to come while it tries to persuade customers to switch to its newer services. "These multiple networks will consume valuable spectrum, leaving little room to launch 3G services," says Alex Trofimoff, an analyst at Sanford C Bernstein. To make matters worse, AT&T Wireless' strategy for plugging its spectrum gaps has just come unstuck. It bid $2.9bn in an auction this year through an affiliate, Alaska Native Wireless, to acquire extra capacity. But that auction was overturned by an appeals court last month, which ruled that the Federal Communications Commission had no right to take the spectrum from its existing owner, the bankrupt NextWave. Hence Mr Zeglis' dilemma in New York and Los Angeles, two cities where he had hoped to acquire extra capacity. Without the NextWave spectrum, AT&T Wireless says it will be able to reach only 70 of the nation's 100 biggest markets. A spokesman adds that the company may still be able to add to its capacity by buying spectrum or swapping it with other carriers. The capacity problem will add to pressure for consolidation in the US wireless industry, according to analysts such as Mr Trofimoff, though the newly independent AT&T Wireless is unlikely to become involved in a merger in the short term. Its bigger rivals, Verizon Wireless and Cingular Wireless, have yet to move ahead with stock-market listings and the setback in European wireless stocks has made the prospects of a foreign deal less likely. The presence of DoCoMo, with a 16 per cent stake, also makes a merger less likely, though it does not rule it out: the Japanese carrier can veto any investment in AT&T Wireless of more than 15 per cent but less than 50 per cent. Monday's spin-off brings AT&T Wireless full circle. Founded on McCaw Cellular, a mobile company that AT&T bought seven years ago, the separation once again creates an independent carrier. But with the structure of the US wireless industry in transition, this deal is unlikely to be its last.

To: S100 who wrote (101438)	7/8/2001 10:35:04 PM
From: mightylakers	Read Replies (1) \| Respond to of 152472

Geez, do those guys always write old stories again and again? They don't even know SKT is pushing WCDMA out of the sight for now and replacing with HDR for next year's world cup? And then they just repeat the same mantra of how VZ is considering WCDMA. Good for a laugh though.