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Vodafone, Bell Atlantic Make Nice in $70 BillionWireless Deal; GTE Goes Along

Channel Partners

November 1, 1999

2 Min Read
Vodafone, Bell Atlantic Make Nice in $70 BillionWireless Deal; GTE Goes Along

Posted: 11/1999

Vodafone, Bell Atlantic Make Nice in $70 Billion
Wireless Deal; GTE Goes Along

Once they fought over AirTouch. Now, AirTouch is them, and they are AirTouch.

Bell Atlantic Corp., New York, and Vodafone AirTouch PLC, Newbury, England, have
decided to merge their wireless operations into a new, and yet unnamed, wireless giant in
a deal valued at $70 billion. Very much a part of that deal will be GTE Corp., Stamford,
Conn., whose merger with Bell Atlantic is still pending at press time.

Earlier this year, Vodafone and Bell Atlantic were banging heads over the right to
acquire AirTouch Communications Corp., San Francisco. Eventually, Vodafone won out in a
$60 billion merger of equals that created a powerful international wireless carrier,
dominant in Europe.

The combined company will consist of Bell Atlantic Mobile Inc. and Vodafone AirTouch.
It will serve 20 million wireless and 3.5 million paging customers in the United
States–making up 95 percent of the population in 49 of the top 50 wireless markets in the
country. Abroad, the new company will serve 23 countries, with a dominant position in

In the United States, where the former AirTouch already had wireless operations in 25
states and 22 of the top 30 markets, the combination causes some analysts to wax

"Ever since the battle for AirTouch at the beginning of the year we’ve been
waiting for this other shoe to drop," says Jeff Kagan, an independent telecom analyst
based in Atlanta. "A national footprint is become the cost of admission to the
increasingly competitive wireless phone business. Unless you have a national footprint,
you cannot even compete for a growing number of customers."

Bell Atlantic will manage the new enterprise, which will be based somewhere in the New
York metropolitan area, and will own 55 percent of the new venture. If the Bell
Atlantic-GTE merger goes through–as it is expected to do in the first quarter of next
year–GTE’s considerable wireless assets will be added to the new company’s arsenal. Bell
Atlantic officials, however, stress that the merger with GTE and the deal with Vodafone
AirTouch are separate transactions, and that neither is dependent on the other.

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