NEW YORK-U.S. telecom giants GTE Corp. and Bell Atlantic Corp. on 28 July announced a US$50-plus billion stock-for-stock pooling of interests that would create the nation’s largest cellular carrier. The new company, to be based in New York, will be renamed without vestige of either corporate identity, GTE Chief Executive Officer Charles R. Lee said at a news conference announcing the merger.
“This merger of equals … joins Bell Atlantic’s sophisticated network serving its dense, data-intensive customer base with GTE’s national footprint, advanced data communications capabilities and long-distance experience,” said the companies.
“The transaction also creates one of the world’s premiere wireless communications companies and combines two companies with extensive and complementary international assets.”
The combined company would have about 20 percent of the estimated 50 million wireless telephony customers in the country. Its 10.6 million wireless subscribers and 100 million population equivalents covered would make it the largest domestic cellular carrier, according to Standard & Poor’s Corp., New York.
“This is a customer driven transaction. Our customers think we all ought to be moving faster than we are,” said Ivan G. Seidenberg, chief executive officer of Bell Atlantic. “Wireless services are exploding. Consumers want more broadband (wireline) access. The customers are moving faster than we are.”
Many issues will be raised and must be resolved with respect to the planned merger, including the status and disposition of certain cellular and personal communications services properties. Regulatory approval is still pending.
“From a consumer perspective, the only chance of monopoly dominance (in some markets) would be in wireless, so there is the possibility [Bell Atlantic and GTE] will have to divest some properties,” said Martin Dunsby, senior manager of telecommunications practice for Deloitte & Touche Consulting Group L.L.C., Atlanta.
