You didn’t expect AT&T Wireless to go quietly into that good night, did you?
AT&T Wireless has a storied history. The carrier can claim roots in both AT&T Corp., which foolishly agreed to give up any cellular play as part of the breakup of Ma Bell, and in McCaw Cellular, the independent cellular company that saw the grand vision of nationwide wireless. AT&T bought the wireless biz from McCaw, and later spun it off.
Now it appears AWS itself will be acquired. By the time you read this, the deadline will have passed for serious bidders to place their bets for the company. The hubbub this week has been whether Vodafone or Cingular Wireless values AWS more. Rumor has it the company will fetch $35 billion or so. Personally, I’m betting Cingular will be the higher bidder because its takeover is cleaner than Vodafone’s. Vodafone may feel its best chance of having a wireless play it can control in the United States is by buying AWS, but should bidding get too high, Vodafone can drop out and take comfort in its stake in Verizon Wireless, the nation’s largest carrier. Should Cingular’s bid not be chosen, parents SBC and BellSouth are left with a wireless player that is in need of spectrum and still has to compete with five other nationwide players.
Consolidation and what’s best for the industry aside, I suspect this drama will take some time to play out.
Wireless has never traveled a smooth road, locally or globally. Besides AWS, the problem with wireless is no one ever wants to exit the business. AT&T missed out on a wireless opportunity the first time around, but paid to get back into the game. DoCoMo, which owns less than 20 percent of AWS, wants a U.S. play, even though its 3G strategy has not played well in the rest of the world. Vodafone, which already owns 45 percent of Verizon Wireless, wants a bigger U.S. play. Deutsche Telekom said it will not take part in bidding for AT&T Wireless. Why? It already paid $40 billion for its U.S. play, T-Mobile USA Inc.
And consider Verizon: The telecom carrier then known as Bell Atlantic chose an alliance with Vodafone after Vodafone won the battle to link up with AirTouch. But then the grumbling began that Verizon didn’t really welcome GSM-centric Vodafone’s presence.
Just looking back at old articles to research this editorial brought back a laundry list of players that have tried successfully or otherwise to get into wireless-MCI WorldCom and this week’s big-buzz company, Comcast (once owned part of Nextel), to name a few.
So whatever happens this week, don’t believe it’s over. It’s just another act in the play.
