>>> Are there any examples of RBOC's investing in an equipment co? <<<
This deal fell apart. They had some trouble with the trial in the Northeast... I think Boston. The technology "MMDS" is/was used for Wireless cable modems.
FOR IMMEDIATE RELEASE
MARCH 29, 1995
BELL ATLANTIC AND NYNEX ANNOUNCE JOINT INVESTMENT IN CAI WIRELESS SYSTEMS
WIRELESS TECHNOLOGY TO SPEED THE AVAILABILITY OF VIDEO SERVICES ACROSS THE NORTHEAST AND MID-ATLANTIC
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NEW YORK/PHILADELPHIA -- NYNEX (NYSE:NYN) and Bell Atlantic (NYSE:BEL) today announced that they have signed an agreement to make a joint investment of up to $100 million in CAI Wireless Systems, Inc. (NASDAQ: CAWS), of Albany, N.Y., a wireless cable company, to speed the delivery of video entertainment and information services to customers in the northeastern and mid-Atlantic states. (In a separate announcement, CAI announced plans to acquire a number of wireless cable systems in the mid-Atlantic region.)
Under the terms of the transaction, Bell Atlantic and NYNEX gain the right to use the distribution systems of CAI to begin offering digital video programming to customers as early as next year. At the same time, the two companies continue to develop and deploy full service networks.
Using digital transmission and compression techniques, MMDS [Multichannel, Multipoint Distribution Service] can send to subscribers more than 100 channels, approximately four times the capacity of analog MMDS service. Where MMDS digital technology is deployed, it is expected to reach 75 percent of the homes with high- quality digital audio and video signals that include local broadcast, basic and premium cable channels and pay-per-view service.
"This technology has an enormous amount of promise," said Walter Rickard, group vice president, NYNEX Entertainment and Information Services. "It will permit us to offer video services to a broad audience much sooner than otherwise possible. With digital MMDS technology we can quickly reach large numbers of customers in both rural and urban areas."
"Digital MMDS services can combine the best qualities of local cable TV with the best of direct broadcast satellite, providing expanded local channel coverage as well as CD-quality sound and superb video," said Stu Johnson, Bell Atlantic group president for Video and Large Business Services.
The investment will occur in two stages. In the first stage, NYNEX and Bell Atlantic will invest $30 million ($15 million each). In the second stage, expected to close later this year, the companies would invest another $70 million ($35 million each). As part of the transaction, NYNEX and Bell Atlantic receive the right to acquire up to a total of 45 percent of CAI through the exercise of warrants.
"This is one of several options that Bell Atlantic and NYNEX can use to quickly enter the video and entertainment market to deliver the kinds of exciting services that our customers want," said Johnson.
"By more quickly delivering our services to the marketplace, we will build value for our recently announced media and technology partnership and demonstrate our commitment to quality and customer service," Rickard said.
CAI currently has access to spectrum in the New York metropolitan area, Albany, Buffalo, Syracuse, Boston, Hartford, Providence, Rochester and Norfolk. In today's announcement, CAI said it will obtain spectrum in additional metropolitan areas: Pittsburgh, Philadelphia, Washington, DC, Baltimore, Cleveland, and Stockton and Bakersfield, CA.
Bell Atlantic Corporation, based in Philadelphia, is the parent of companies that provide a full array of local exchange telecommunications services in West Virginia, New Jersey, Pennsylvania, Delaware, Maryland, Virginia and Washington, D.C. The corporation is at the forefront of developing a variety of new products, including video, entertainment and information services.
Bell Atlantic also owns an interest in Telecom Corporation of New Zealand and is the parent of companies that provide business systems services for customer-based information technology throughout the U.S. and internationally. In addition, Bell Atlantic is the parent of one of the nation's largest cellular carriers and has an ownership position in cellular properties internationally, including Grupo Iusacell, S.A. de C.V., Mexico's largest independent cellular company.
NYNEX provides a full range of communications services in the northeastern United States and selected markets around the world, including the United Kingdom, Thailand, Gibraltar, Greece, Indonesia, Poland and the Czech Republic. The company has expertise in telecommunications, cable television, directory publishing, video entertainment and information network and delivery services.
ba.com
Bell Atlantic, NYNEX, CAI Wireless Systems Suspend Business Agreement For One Year
CAI Provided with Option to Repurchase Bell Atlantic, NYNEX Investment in CAI Securities
Changing Market Conditions, Full Service Network Buildouts Lead to Re-Evaluation Of Plans for Digital Wireless Video Strategy
December 13, 1996
Media contacts:Bell Atlantic Enterprises - Brian R. Wood 215-963-6204
brian.r.wood@bell-atl.com
Bell Atlantic Video Services - Larry Plumb 703-708-4360
lawrence.d.plumb@bell-atl.com
NYNEX - Maureen Flanagan 212-395-3519
notes.mflanaga@nynex.com
New York, Philadelphia and Albany -- Bell Atlantic (NYSE: BEL), NYNEX (NYSE: NYN) and CAI Wireless Systems, Inc. (NASDAQ:CAWS) are suspending a 1995 business agreement for one year and providing CAI with the option to repurchase a $100 million investment in CAI securities made by Bell Atlantic and NYNEX.
Under a new agreement signed yesterday, the way has been cleared for CAI to develop a more flexible approach to the use of its MMDS spectrum, including the provision of video, voice and data services in Northeast and mid-Atlantic markets.
Bell Atlantic and NYNEX said they were re-evaluating their decision to use CAI's MMDS (Multichannel Multipoint Distribution Service) transport systems as an early-to-market video strategy due to a number of factors, including changing market conditions for entertainment services, the technical availability of fiber-based Full Service Networks and CAI's desire to expand its use of spectrum beyond video transport.
As a result, the companies have re-negotiated a 1995 agreement to develop and deploy wireless video networks and have also suspended plans to jointly launch wireless video services in Hampton Roads, VA., and Boston, Mass., in 1997.
Under the terms of the agreement announced today, CAI will be given an option for up to one year to purchase Bell Atlantic and NYNEX's interest in the company. The agreement also enables CAI to expand the markets in which it may seek FCC approval for mixed use of MMDS spectrum.
Bell Atlantic and NYNEX added that they continue to view the marketplace for broadband services such as video and high speed data connectivity over the Full Service Network as an attractive long term growth strategy. Therefore, they are still evaluating a variety of delivery systems for video and entertainment services.
Bell Atlantic is currently providing video programming over its fiber network in Toms River, N.J., and recently announced plans to deploy switched digital video in the Philadelphia market.
NYNEX also has selected switched digital technology as part of the company's plan to deliver the next generation of network technology to its customers. In October, NYNEX signed a multi-year agreement with General Instrument Corporation that includes one million lines of transport electronics to be deployed in metropolitan Boston and New York City areas, as well as parts of Long Island and Westchester County, N.Y. The first installation of this new technology, initially for voice applications, will begin in metropolitan Boston early next year.
"CAI is anxious to test the versatility of its considerable MMDS spectrum in new endeavors that combine video, voice and data transmission," said Jared E. Abbruzzese, chairman and CEO of CAI. "We have learned much from building digital wireless systems during this trial. We appreciate that they have given us the opportunity to charter a different destiny for our company, and we hope to aggressively press the regulatory envelope for full flexible use of MMDS spectrum."
CAI has been exploring mixed use of MMDS spectrum in markets not covered by the original agreement with Bell Atlantic and NYNEX, such as Rochester, N.Y., where the FCC has granted the company authority for a market trial with 500 users. The company has also requested FCC approval for a two-way flexible-use MMDS trial in Hartford, Conn.
Bell Atlantic Corporation is at the forefront of the new communications, entertainment and information industry. In the mid-Atlantic region, the company is the premier provider of local telecommunications and advanced services. Globally, it is one of the largest investors in the high-growth wireless communication marketplace. Bell Atlantic also owns a substantial interest in Telecom Corporation of New Zealand and is actively developing high-growth national and international business opportunities in all phases of the industry.
NYNEX is a global communications and media corporation that provides a full range of services in the northeastern United States and high growth markets around the world, including the United Kingdom, Thailand, Gibraltar, Greece, Indonesia, the Philippines, Poland, Slovakia and the Czech Republic. The corporation is a leader in telecommunications, wireless communications, directory publishing and video and entertainment services. NYNEX is also managing sponsor of FLAG -- Fiberoptic Link Around the Globe -- the world's longest undersea fiber optic communications cable.
CAI, based in Albany, N.Y., operates analog-based wireless systems in New York City, Rochester and Albany, Philadelphia, Washington, D.C., and Norfolk/Virginia Beach, Va., and has a portfolio of wireless cable channel rights in eight additional markets, including Long Island, Buffalo and Syracuse, N.Y., Providence, R.I., Hartford, Conn., Boston, Baltimore and Pittsburgh.
In addition, CAI owns approximately 52 per cent of CS Wireless Systems, Inc., which is jointly owned by Heartland Wireless Communications, Inc. CS Wireless has, on a pro forma basis for announced transactions, approximately 6.2 million line-of-sight (LOS) households and 77,550 subscribers in 17 markets located primarily in the Midwest and the Southwest regions of the United States. |
