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Strategies & Market Trends : Rande Is . . . HOME -- Ignore unavailable to you. Want to Upgrade?

To: jeer who wrote (2060)	1/18/1999 3:19:00 PM
From: Bill on the Hill	Respond to of 57584

Re: Wireless With the acquisition of Airtouch by Vodafone it looks to me like it could heat up the other wireless choices for acquisition. This article just released helps to understand it for me. biz.yahoo.com U.S. wireless market unchanged by AirTouch deal By Jessica Hall NEW YORK, Jan 18 (Reuters) - Vodafone Group Plc's $66.5 billion acquisition of AirTouch creates a massive global network spanning 23 countries, but fails to change a U.S. wireless phone market dominated by national companies such as AT&T Corp., analysts said. Britain's Vodafone (quote from Yahoo! UK & Ireland: VOD.L) on Friday won the bidding for AirTouch, edging out Bell Atlantic Corp. (NYSE:BEL - news), the No. 1 U.S. local phone company. Bell Atlantic had ambitions to combine with AirTouch to create a new, national wireless network to challenge AT&T (NYSE:T - news) and Sprint PCS (NYSE:PCS - news). Vodafone, however, is new to the U.S. market and its acquisition of AirTouch will not increase competition or benefit consumers in the United States the way a potential AirTouch-Bell Atlantic combination would have, analysts said. ''The sad part is that the U.S. marketplace won't even see one inkling of change,'' said Jeffrey Kagan, an independent telecommunications analyst. A combined AirTouch-Bell Atlantic ''could have been one of the most formidable competitors possible to go head-to-head with AT&T to reinvigorate the competitive marketplace, but now it's just going to be business as usual,'' Kagan said. Seeing Bell Atlantic lose its chance for AirTouch gives AT&T and Sprint PCS more time to increase their dominance and further build out their wireless networks, analysts said. ''This is great news for AT&T. AT&T must be popping champagne corks over this,'' said Andrew Cole, head of the wireless group for Renaissance Worldwide, a Boston-based strategy consulting firm. AirTouch said it still aims for the combined Vodafone-AirTouch to forge a U.S. partnership with losing bidder Bell Atlantic. Bell Atlantic, which already has a small partnership with AirTouch called PrimeCo Personal Communications, declined to comment on possibly expanding that joint venture. Bell Atlantic filed a lawsuit late Friday against AirTouch, seeking to void certain clauses in the PrimeCo partnership that prevent it from competing against AirTouch. ''Once Bell Atlantic licks its wounds, it really has few options besides doing the joint venture. It just filed the lawsuit so it has some leverage,'' said one analyst, who declined to be named. Without a joint venture with AirTouch and Vodafone, Bell Atlantic will be forced to buy a series of smaller wireless companies to create a national network, analysts said. ''Bell Atlantic is behind the eight ball. Anything they do going forward -- absent a compromise with Vodafone -- gets harder. There are no major, ripe pickings out there,'' said Robert Egan, an analyst with the Gartner Group, a market research firm. While a joint venture is Bell Atlantic's only viable option for getting national coverage, some analysts were skeptical about how effective a three-way joint venture would be. ''Joint ventures don't seem to have worked in the wireless business. A joint venture won't be a strong enough competitive threat to the national powerhouses that have emerged,'' said Walter Piecyk, a wireless analyst with PaineWebber. Piecyk said a three-way joint venture would have a better chance of surviving if one company took management and operating control and developed a national marketing and branding campaign. The AirTouch takeover saga, which lingered for two weeks and brought out at least three possible bidders, has highlighted the scarcity of attractive acquisition candidates, analysts said. ''There are not many good properties left. AirTouch was the most attractive company to go after .... Consolidation will continue in the industry, but there will be only small, incremental acquisitions,'' said Berge Ayvazian, a telecommunications analyst with the Yankee Group. Over the next year, companies such as Nextel Communications Inc. (Nasdaq:NXTL - news), Western Wireless Corp. (Nasdaq:WWCA - news), Powertel Inc. (Nasdaq:PTEL - news) and Aerial Communications Inc. (Nasdaq:AERL - news) may come into play, analysts said. ''Nextel has been a ripe acquisition target for some time. This whole Vodafone-AirTouch-Bell Atlantic scenario has just highlighted that,'' Egan said. Ameritech Corp. is also putting on sale some its wireless assets as part of its planned merger with SBC Communications, sources familiar with the situation said. Vodafone would be a logical buyer of Ameritech's assets if it makes other acquisitions in the United States, analysts said. --------------------------------------------------------------------------------