After several broken engagements, MCI Communications Corp. thinks it has finally found a partner it can commit to long-term for wireless service, NextWave Telecom Inc.
Although MCI has been down this road before, this time I think the company may have done it right.
MCI-which sold its cellular and paging licenses to Craig McCaw in the mid-1980s-has been trying to re-enter the wireless communications arena ever since. When the Federal Communications Commission announced plans to auction spectrum for personal communications services, MCI was first in line, asking for a nationwide PCS license. The long-distance carrier formed a consortium of 255 companies that would offer PCS locally, with MCI serving as the national coordinator, allowing the local carriers to interconnect to MCI for seamless service. The FCC quashed MCI’s hopes, however, when it decided against issuing a nationwide license in 1993.
MCI then tried to tie the knot with Nextel Communications Inc., hoping to gain wireless access through Nextel’s specialized mobile radio licenses. But MCI backed out of that deal in August 1994, saying it was uncertain of Nextel’s technology. That October, MCI pursued an alliance with what is now PrimeCo Personal Communications L.P., but talks broke down, reportedly because MCI placed too high a value on its brand name.
MCI stubbornly maintained it would become a wireless power, signing reseller agreements with Paging Network Inc. and SkyTel Corp. and then buying Nationwide Cellular Service Inc., the country’s largest reseller.
Listen to what MCI President Gerald Taylor told RCR in November 1994: “We’ve had a strategy all along to integrate our network into local facilities in the same way that we’ve integrated our network into local wireline services. … Ninety percent of our investment is behind us in wireless. We just need the interoperability agreements with those that have local franchises. We’ll make them nationwide because of our network. … Our strategy is an offensive strategy to put products and services in the hands of the customers and to integrate wireless services with other services that we’re providing. Don’t think of us as a reseller.”
MCI’s strategy really hadn’t wavered. It wanted into wireless. It decided it didn’t have to own the network. And it didn’t have to cough up billions of dollars for licenses.
NextWave is promising to meet MCI’s wireless needs. MCI is finally getting its nationwide PCS network. And NextWave found a wholesaler to bring to fruition its dream to be the carrier’s carrier.
It could prove to be a match made in heaven (or at least in the ether).
