Although sizable telecom rivals in cellular, personal communications services and paging markets nationwide, AirTouch Communications Inc. and AT&T Wireless Services Inc. hold hands in the San Francisco Bay Area, where business as usual is a balancing act.
Erin Eggleton, spokeswoman for Cellular One of San Francisco said the companies’ competitive interests in other markets pose no problem for the Bay Area company, which employs nearly 800 people. One presumed conflict is rivaling technologies. AirTouch supports Code Division Multiple Access while AT&T Wireless backs Time Division Multiple Access.
But Eggleton explained, “the overriding goal is what’s the best thing for our customers.” A few years ago when Cellular One in San Francisco needed to increase network capacity, “TDMA was ready and available and could provide benefits immediately,” she added.
So how do such fierce competitors manage a joint business without comprising their internal strategies and business philosophies? Todd Wolfenbarger, spokesman for AT&T Wireless, said an operating committee comprised of a few members of both companies oversees the business, acting much like a board of directors. However, much of the Bay Area carrier’s business goals are driven by the local office.
“For the most part, the partners let us decide what’s best for our market,” asserted Eggleton.
In fact, the strange bedfellows arrangement is not uncommon, explained Wolfenbarger. When cellular licenses were distributed by lottery in the early 1980s, regional Bell operating companies were provided B-side licenses only. It wasn’t uncommon for RBOCs to then seek investments in various A-side licenses. Up to 30 partners could own a license, said Wolfenbarger. Most sold their shares. In several cases a few large partners remained.
The Bay Area Cellular One was formed in 1986 as a partnership of AirTouch’s and AT&T Wireless’ ascendants PacTel Cellular and McCaw Cellular Communications Inc. Associated Communications held a minority stake in the deal. In 1993, PacTel and McCaw bought Associated’s shares and each contributed additional markets. PacTel took Kansas City, Mo., and McCaw portions of Dallas and formed an equal joint venture called CMT Partners. At the time, those Dallas area markets were property of Lin Broadcasting, which AT&T Wireless/McCaw later acquired in full.
AT&T Wireless is partnered with BellSouth Cellular Corp. in Los Angeles, as L.A. Cellular, and in Houston, as Houston Cellular, said Wolfenbarger.
In any of these ventures, is either partner interested in selling? It may not happen any time soon in San Francisco, said Eggleton, adding that AirTouch and AT&T Wireless signed a 99-year contract. Wolfenbarger did not rule out such discussion, but said AT&T Wireless intends to stay in each of the markets.
