The sale of Bellcore to a high-tech California information company will sever one of the final threads binding the former Bell empire, and mark an era of possessive competition between the regional Bell operating companies.
Science Applications International Corp. of San Diego was rumored to be paying $700 million for the world-class creator of communications software, engineering and consulting service. Officials wouldn’t discuss the sale price. The deal is expected to close in the latter half of next year.
SAIC will hold Bellcore as a wholly owned subsidiary and the company is expected to remain in New Jersey. However, Bellcore will lose the Bellcore name after one year. The RBOCs see the “Bell” name as a valuable asset, and it wasn’t part of the sale.
Bell Communications Research Inc. was created by the seven regional Bell operating companies in 1984 following the break-up of AT&T. All seven contributed equally to its budget, which in 1996 was more than $1 billion. The seven will divide the money from the sale equally as well, the companies said.
Today, the RBOCs no longer have a common purpose. They are competitors in the telecommunications industry, unwilling to share their unique strategies, said Marty Kaplan, president of Network Services Group for Pacific Bell, speaking on behalf of the RBOCs.
“While our needs for Bellcore products and services continues, these needs are in most cases unique to each company rather than common across all seven, as in the past,” Kaplan said.
So, in April 1995, Bellcore was put up for sale. The RBOCs wanted a buyer that would share Bellcore’s visions of advanced software development, could afford to acquire and operate the business, was vendor neutral and was free from the regulatory and judicial restrictions of the Bellcos.
Bellcore sold $800 million in products and services to the RBOCs last year. The Baby Bells account for 75 percent to 80 percent of Bellcore’s business.
SAIC is employee owned and reported revenues of $2.2 billion last year. In recent years, SAIC has been positioning itself to provide advanced systems and software engineering in the commerical and civilian sectors.
