Several important wireless markets will be up for grabs during the next year-a result of overlapping wireless markets created by the merger of Bell Atlantic Corp. with GTE Corp. as well as Bell Atlantic’s agreement to merge its wireless assets with those of Vodafone AirTouch plc.
The Department of Justice last week approved the Bell Atlantic/Vodafone transaction subject to a consent decree requiring the companies to rid themselves of overlapping wireless properties. Wireless carriers are allowed to control no more than 45 megahertz of spectrum in a given market.
Some analysts have speculated AT&T Wireless Services Inc., which jointly owns the San Francisco market with AirTouch, would be a likely candidate to buy out that market. Analysts also speculate a regional carrier, such as Alltel Corp., might be interested in expanding its footprint by purchasing some of the other available properties.
The companies said the process of marketing the overlapping properties already has begun. The conflicts will be addressed by divesting one of two competing properties in each overlapping market.
The Justice Department granted the trio an added measure of flexibility in addressing the overlaps. In markets where the overlap is caused by a cellular and PCS interest, the companies have until they close their transactions or until June 30 to shed their overlapping properties, whichever is later.
Bell Atlantic and Vodafone expect to close their transaction during either the second or third quarter next year, while Bell Atlantic’s merger with GTE is expected to close near the end of the first quarter.
In addition, the consent decree allows the companies to retain 10 megahertz of spectrum in areas where they choose to sell PCS properties. The companies said they may opt to trade the overlapping operations for assets in markets where they have no local wireless presence.
The combined companies will have to shed at least one 30-megahertz cellular license in San Francisco and San Diego; Cleveland; Phoenix; Albuquerque and Las Cruces, N.M.; and El Paso, Texas. Other overlaps are created through Bell Atlantic and AirTouch’s jointly owned personal communications services company, PrimeCo Personal Communications L.P., including Houston, Chicago, and Tampa, Fla.
The remaining overlaps occur in Cincinnati; Seattle and Spokane, Wash.; Austin and San Antonio, Texas; Miami, Fort Myers, Jacksonville and Pensacola, Fla.; Mobile, Ala.; Anderson/Greenville, S.C.; and Norfolk/Richmond, Va.
When combined, the trio will overlap in 22 markets with a total of 49 million pops and 3 million customers.
