When billionaire John Kluge of Metromedia International Group Inc. sold his company’s film and television properties last month, he said the transaction would allow Metromedia to focus on its new mobile phone and paging ventures in Eastern Europe and the Far East.
This will be 81-year-old Kluge’s second time around in the mobile communications business.
Ten years ago, New Jersey-based Metromedia was the fourth largest cellular operator in the United States, with 61,000 subscribers. It offered service in heavily populated markets including New York City, Chicago, Boston, Baltimore, Md., and Washington, D.C.
Metromedia Paging Services was one of the largest U.S. radio common carriers, with 900,000 subscribers.
But in 1985, Metromedia began selling off its entertainment properties, such as the Harlem Globetrotters and the Ice Capades. It also sold the majority of its cellular and paging properties to SBC Communications Inc. for $1.65 billion; SBC later sold the paging properties to MobileMedia Communications Inc.
Lin Broadcasting Corp. paid $1.9 billion for Metromedia’s New York market; Comcast Corp. purchased the Philadelphia cellular property for $1.1 billion.
Kluge’s company then focused on the restaurant business and long-distance telephone service. Metromedia owns food chains including Bennigan’s and Steak and Ale.
Through acquisition and compilation, Metromedia helped create what is now known as WorldCom Inc., the nation’s fourth largest long-distance phone company. Metromedia sold its 16.3 percent share in WorldCom to the public in 1995.
But Metromedia again has been attracted to wireless opportunities, this time in the developing regions of the world. The company’s Communications Group is aligning with local businesses or governments to take advantage of regional power and connections. Metromedia is making investments in mobile telephony, paging, wireless cable TV and radio broadcasting.
China
Metromedia has formed a joint venture with Golden Cellular Corp. of China to provide wireless local loop equipment and system technology, as well as software service and maintenance to public and private telephone networks throughout China.
Metromedia-Jinfeng is a pre-operational venture into which Metromedia has invested $3 million and owns 60 percent.
Metromedia has an agreement with DSC Communications Corp. of Texas to exclusively provide DSC’s Multispan technology in certain networks in China and Eastern Europe. Multispan transmits voice and data over radio waves between a central office and the subscriber’s office or apartment building. Metromedia sees Multispan as a viable way to provide low-cost service for numerous subscribers in one building.
Several months ago, Metromedia acquired Asian American Telecommunications Corp., which has a contract to provide telecommunications service in Sichuan Province of China. The contract is with China United Telecommunications Corp., or Unicom. AAT also has an agreement to build a Global System for Mobile communications network for 50,000 subscribers in the Chinese city of Ningbo.
Eastern Europe
Through a joint venture with Western Wireless Corp., Metromedia bought an interest in Magticom Ltd. in the country of Georgia. Magticom has a license to provide 900 MHz GSM mobile telephony service. Metromedia owns 34 percent of Magticom, and has contributed $2.4 million to the venture. Metromedia also owns 49 percent of a wireless cable TV venture in Tbilisi, Georgia.
Metromedia also owns 24 percent of Baltcom, a 900 MHz GSM venture that launched service in the Republic of Latvia in March. Metromedia has invested $7.9 million to date in Baltcom. Metromedia also owns 50 percent of a wireless cable TV service in Riga, Latvia-Baltcom TV-and is a 55 percent owner of Riga’s Radio Skonto broadcasting service.
“We hope to capitalize on the fact that the Baltcom name is associated with a number of our other ventures in Latvia,” Metromedia said. The ability to cross-market services is a strategic goal.
Metromedia is a partner in several paging operations as well: Baltcom Estonia (39 percent), CNM in Romania (54 percent), Kamalak Paging in Uzbekistan (50 percent), Paging One in Tbilisi, Georgia (45 percent), Paging Ajara in Ajara, Georgia (35 percent), Raduga Poisk in Nizhny Novgorod, Russia, (45 percent), Alma Page in Kazakstan (50 percent), Baltcom Plus in Latvia (50 percent) and Pt-Page of St. Petersburg, Russia (40 percent).
The company also owns trunked mobile radio systems, primarily through Protocall Ventures Ltd., a United Kingdom company of which Metromedia owns 56 percent. Metromedia has provided Protocall with $2.3 million in credit to fund its operations.
Trunked radio service held in part by Metromedia is Belgium Trunking in Brussels and Flanders (24 percent), Radiomovel Telecomunicacoes of Portugal (14 percent), Teletrunk Spain (6-16 percent), National Business Communications of Romania (58 percent) and Spectrum of Kazakstan (31 percent).
Metromedia has interests in wireless cable TV service in 13 Eastern European markets and the former Soviet Union, with 69,000 subscribers at year-end 1996.
