NEW YORK-Vodafone AirTouch plc confirmed Sept. 7 its intentions to forge a mobile telephony alliance with Bell Atlantic Corp., which has refused to comment on this possibility.
Other options for Vodafone include buying wireless operators in markets that would fill out the company’s domestic footprint or buying spectrum from bankrupt carriers, according to Vodafone AirTouch spokesman Jonathan Marshall.
Chris Gent, Vodafone’s chief executive, told analysts Sept. 3 he thinks the negotiations with Bell Atlantic have only a 20 percent to 30 percent chance of success, Reuters reported.
The British carrier, headquartered in Newbury, Berkshire, also filed a shelf registration with the Securities and Exchange Commission Sept. 7 for up to $8 billion in debt, common and preferred stock and warrants.
Net proceeds will be used for general corporate purposes, which may include working capital and debt repayment, according to the filing.
Vodafone AirTouch said it is discussing joining its network in states in the West with Bell Atlantic’s network, which covers 24 states in the East. It also said it continues to review several other unspecified options to expand its wireless telecommunications operations in the United States.
Their lack of nationwide wireless networks places both Vodafone and Bell Atlantic at a competitive disadvantage to rivals like Sprint PCS, AT&T Corp. and Nextel Communications Inc. Besides saving each company the cost of building a national network, the partnership also would allow them to avoid roaming charges when their customers make calls on outside networks.
In addition, an alliance between Vodafone AirTouch and Bell Atlantic would bolster both in their competition with SBC Communications Inc., which agreed in January to purchase Comcast Cellular Communications Inc., Wayne, Pa.
With its acquisition of San Francisco-based AirTouch Communications Inc., Vodafone added about 9 million American customers to its 6 million wireless subscribers in the United Kingdom.
Outbidding New York-based Bell Atlantic, Vodafone paid $62 billion to purchase AirTouch in a merger completed June 30. Meanwhile, Vodafone AirTouch and Bell Atlantic agreed in August to dissolve the pair’s PrimeCo Personal Communications joint venture by dividing its assets.
Since beating out Bell Atlantic for AirTouch, Vodafone has stated publicly it would be interested in a national partnership with the former Baby Bell.
Even if Bell Atlantic is receptive to this idea, its negotiations with Vodafone AirTouch may have to take a temporary back seat to the former Baby Bell’s $65 billion acquisition of GTE Corp. As part of that transaction, which is expected to be completed by year-end, Bell Atlantic and GTE must first sell off certain of their wireless assets to comply with U.S. Department of Justice conditions for their merger.
