Look for “clustering” to become a common word in tomorrow’s wireless dictionary as companies continue to refine their strategies amid an increasingly competitive marketplace.
GTE Mobilnet Inc. announced last week plans to sell its PCS license for the Denver market to Western Wireless Corp. As its name implies, Western Wireless operates cellular properties in the Western United States and through some PCS buys has expanded its wireless footprint. Denver’s PCS market gives Western a contiguous cluster of properties from Portland, Ore., down through Texas.
GTE’s reason for the sale of the property: Denver doesn’t fit into its cluster strategy; that is, GTE doesn’t have existing wireline and/or wireless systems in place in Denver. However, GTE bought the Spokane-Billings PCS license from Poka Lambro Telephone Cooperative, noting that market does fit with its telecom strategy.
Although many an analyst predicted the PCS industry would be marked by this horse trading-and eventual consolidation-I’m a little surprised it is happening so quickly. But since it’s started, I expect we’d better start preparing for the flood of sales that will take place once the C-block auction is over.
Future sales could come from Three-sixty Communications Co.-the new name for Sprint Cellular Co.’s expected spinoff. The company says it has no plans to sell some of its lone cellular properties, but I suspect that would change if the price were right. Back when Sprint Cellular was still Centel, the company was marred by the fact its properties didn’t fit well geographically with each other-or any prospective buyers. Sprint’s great vision in buying Centel was that it could cluster its local, long-distance and wireless offerings well in the markets it served. Sprint has since decided it can cluster better using PCS licenses.
One partnership that has made sense has been the combination of Bell Atlantic and Nynex cellular properties. Bell Atlantic Nynex Mobile reported the largest quarterly net addition reported by any cellular carrier.
All this clustering talk is more fodder for the bigger-means-better, share-the-profit-share-the-risk strategy that is unfolding in wireless today. And this consolidation is having a ripple effect farther down the food chain.
Manufacturer Andrew Corp. said it plans to purchase The Antenna Co., again siting a bigger-is-better strategy. And Brightpoint Inc. announced plans to acquire distribution company Allied Communications Inc.
After all, if powerful Bell Atlantic Mobile has hard numbers that say it makes business sense to ally with also-powerful Nynex Mobile, what else can we expect from companies without those kinds of resources?
