AT&T Wireless Services Inc. has acquired the Little Rock, Ark., and Memphis, Tenn., 1900 MHz personal communications services licenses from SBC Communications Inc.
In addition to acquiring the two major trading area licenses, AT&T said it also will gain control of SBC’s 35.7 percent interest in Pittsburgh’s cellular market.
“This allows us to continue to grow the largest wireless coverage area in the United States,” said Steve Hooper, AT&T Wireless’ president and chief executive officer. AT&T said it now can provide service to more than 207 million potential customers throughout 82 percent of the United States.
For its part, SBC will acquire control of AT&T Wireless’ Arkansas cellular properties plus its 9.4 percent share of the Worcester, Mass., cellular system.
“Gaining control of the established cellular operations in Arkansas offers several advantages over development of the PCS licenses,” said Mary Manning, president of Southwestern Bell Wireless. “It lets the company move to a full-service position much more quickly, avoiding start-up costs, substantial capital investments and lengthy buildout times. And, it provides technical compatibility with our current cellular systems.”
According to a SBC spokesman, company “research clearly shows that customers want a total communications provider. We’re positioned now in our traditional five-state area to be that provider.”
The spokesman said the company intends to build out its remaining PCS license for the Tulsa, Okla., MTA. SBC also has applied to bid for certain D- and E-block PCS licenses in the upcoming spectrum auction.
Telecommunications companies “have to be prepared to offer a range of services-a full service strategy,” noted Jonathan Foxman, director of strategic and business planning at BIA Consulting Inc. “There’s a danger in putting all your eggs in one basket. Integration is important.”
“Why take all the risk with a 30-megahertz license?” he continued. “They can start off with 10 megahertz-which provides plenty of spectrum to introduce service-and add more licenses later.”
“[PCS] companies will fail. That’s the nature of startups, and licenses will be available at a discount in the future,” he said.
AT&T and SBC said their transactions are expected to be completed in the first quarter of 1997.
