WASHINGTON-TeleCorp PCS Inc. signed an exclusive contract valued at $280 million with Lucent Technologies Inc. to supply the infrastructure for its Time Division Multiple Access network.
TeleCorp entered into a joint venture with AT&T Wireless Services Inc. in January and is the carrier’s largest affiliate. TeleCorp’s TDMA network will provide co-branded personal communications services to 15 million potential customers in the areas surrounding Boston and St. Louis; in New Orleans; Memphis, Tenn.; and Little Rock, Ark.; as well as in Puerto Rico.
The TeleCorp network will be fully compatible with AT&T Wireless’ national TDMA network, and customers will be able to roam on the two PCS networks as part of the companies’ 20-year agreement.
TeleCorp has significant financial support through senior bank credit facilities with Chase Capital Partners in partnership with Desai Capital Management Inc., and additional funding from Toronto Dominion (USA) Inc., BT Alex. Brown Inc., Entergy Technology Holding Co., Hoak Capital Corp., J.H. Whitney & Co., MC Partners, Northwood Ventures and OneLiberty Ventures. Lucent will provide up to $80 million in vendor financing for the network construction project as part of the deal, the company said.
Lucent will provide its Interim Standard-136 wireless platform, operating at 1.9 GHz. The TDMA platform includes Lucent’s 5ESS-2000 digital switching system and cell site equipment. The platform uses the TDMA-standard Digital Control Channel, a signaling system that operates discretely to offer a variety of intelligent-networking options such as virtual private networks.
“Lucent’s IS-136 platform gives TeleCorp a rich suite of digital services equal to or better than our competitors on the day we launch,” said David Knutson, vice president of engineering and operations for TeleCorp, adding that the company will create a significant number of jobs in the local markets related to the network buildout and providing service afterward.
TeleCorp plans to deploy the Lucent infrastructure equipment in all of its markets, and switch-site construction is underway in Boston, New Orleans, Puerto Rico and Little Rock. TeleCorp expects to launch commercial services by early 1999, said Russell Wilkerson, a TeleCorp spokesman.
Based in Washington, D.C., TeleCorp was formed in 1997 by Gerald T. Vento and Thomas H. Sullivan, who both worked at American Personal Communications Inc. APC in November 1995 launched the first PCS network in the United States in the Washington, D.C./Baltimore market while partnered with Sprint Spectrum L.P.
Vento, now TeleCorp’s chief executive, was vice chairman and CEO of Sprint Spectrum/APC. Sullivan, vice president and general counsel for TeleCorp, specializes in telecommunications law and was on an APC advisory board. Sullivan also previously was a partner in charge of telecommunications for McDermott, Will & Emery.
Much of TeleCorp’s senior management gained PCS experience while at Sprint Spectrum/APC, and joined TeleCorp after Sprint bought the remaining shares in the partnership with APC in January, said Wilkerson, himself an APC veteran. Sprint previously had a 58.5-percent stake in the partnership. When APC became a wholly owned subsidiary of Sprint Spectrum in January, the company’s founder, Wayne Schelle, retired, and his son, Scott Schelle, resigned as president.
