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To: Clarksterh who wrote (22494)	2/4/1999 5:34:00 PM
From: Ruffian	Respond to of 152472

Vodafone Influence 3G> Widespread influence Electronics Times by John Walko So the phoney war is over and Vodafone has emerged victorious against all comers - but especially [ Bell ] Atlantic - in the battle for control of AirTouch, the US's leading wireless network operator. The price seems high, at $62bn, but Britain's biggest takeover, to create the world's largest mobile comms company, with a market capitalisation of $110bn, really is the mobile deal of the decade. The superlatives are impressive. Vodafone AirTouch will become the third largest company in the UK, bigger than BT, and the sixth largest telecoms company in the world. Chris Gent, chief executive of Vodafone and CEO of the combined operation, says the prospects for the group, on the back of outstanding growth for mobile telephony, mean it will not take long for Vodafone AirTouch to become one of the top 10 organisations in the world. Not bad for a company that started in 1985 as a modest subsidiary of then mainly defence electronics-oriented Racal, and was spun off in 1988 when it won one of the two licences to operate a mobile service in the UK. At the time, mobile services were seen by many as no more than a passing fancy with hardly a threat to the booming and huge fixed network operators. AirTouch has a similar pedigree and growth rate, being a spin-off from the west coast operator Pacific Telesis and headed since its inception by one of the visionaries of the US mobile scene, Sam Ginn. He will become a very rich man once the deal closes in about six months' time, and remains non-executive chairman of the combined operation. Ginn underlined the enormity of the "exciting journey" by pointing out that 10 years ago, no one had heard of his company and few had come across Vodafone. That was partly because few really appreciated how the mobile revolution would change the nature of global telecoms. Now, he says, some still do not believe him when he suggests that half the population in the developed world will have mobile phones within four to five years, up from a penetration of 25% now. Vodafone secured the acquisition, described as a merger of equals, after Bell Atlantic, which had bid $45m for AirTouch, pulled out of the auction. Bell Atlantic immediately filed a lawsuit against AirTouch, which analysts say is aimed at ensuring the companies' joint venture, PrimeCo, keeps to agreements that will allow coast-to-coast roaming in the US. Ginn and Gent says the lawsuit has "zero chance" of halting the deal and the markets certainly believed them, with Vodafone shares rising by 15% following confirmation of the acquisition. The really different and exciting thing about both Vodafone and AirTouch, and which makes this such a good deal, is that both companies have a significant global reach. Together, they will have operations in 23 countries and reach more than 23 million subscribers. Incredibly in view of their myriad of minority and majority shareholdings in licences around the world, only Germany poses a conflict, with AirTouch having a 35% stake in the country's most successful digital network, Mobilfunk D2 (the other 65% being owned by Mannessmann), while Vodafone has a 17% stake in perhaps the least successful, E-Plus. Not surprisingly, Gent says the combined group will concentrate on D2 and dispose of the latter. This international reach should give Vodafone AirTouch an enormous influence on manufacturers to offer economies of scale on infrastructure equipment, on standardisation issues in the mobile sector and in negotiations with handset makers. (Copyright 1999)