Bell Atlantic, Vodafone AirTouch, GTE eliminate wireless market overlaps

Taking a significant step forward to completing a nationwide wireless footprint, Bell Atlantic, Vodafone AirTouch, and GTE have reached agreement to sell overlapping wireless operations in San Francisco, San Diego, and Houston to AT&T Wireless. Operating as Verizon Wireless, the companies will maintain a wireless presence in San Francisco, including San Jose and Oakland, and in Houston, including Beaumont and Galveston, through the GTE Wireless operations. In San Diego, Verizon Wireless operates the former Vodafone AirTouch property. Verizon will also retain 10 MHz of PCS spectrum in the Houston market.

The move gives AT&T Wireless San Francisco, San Diego, and Houston—the last three cities in the nation's top 15 wireless service markets that don't have AT&T-branded wireless service. In San Francisco, AT&T Wireless is acquiring the remaining interest it doesn't already own from Vodafone AirTouch. The system covers a population base exceeding 7 million people, and as of first quarter of 2000 served nearly 1 million subscribers under the CellularOne brand.

It is acquiring the San Diego system from GTE. The system covers a population of nearly 3 million people and as of March 31, 2000 had more than 200,000 subscribers with the GTE Wireless brand.

AT&T Wireless is acquiring the Houston system from PrimeCo PCS. The system covers a population of about 5.7 million people and served 190,000 subscribers at the end of the first quarter with the PrimeCo brand.

Collectively, the transactions are valued at approximately $3.3 billion. The combined operations cover about 15 million POPs and serve more than 1.3 million customers. About 1,400 employees will be involved in the transfer. The companies expect the transactions to close concurrent with or following the Bell Atlantic/GTE merger and before year-end.

Prior to today's announcement, AT&T owned 53% of San Francisco and 55% of a competing system in Houston. Neither of these systems are AT&T branded or managed. AT&T Wireless expects appropriate ownership adjustments in the Houston market will be required by regulators. Other adjustments to subscriber totals and financial reporting will also be necessary following the closings.

Market Status Summary
San Francisco
Business Being Divested

• Vodafone AirTouch's remaining stake in wireless operation owned in partnership with AT&T
  
• Marketed as CellularOne
  
• TDMA digital standard
  
• Status: Vodafone AirTouch has signed agreement to sell the business to AT&T

Business Being Retained

• GTE Wireless operation
  
• Marketed as GTE Wireless
  
• CDMA digital standard
  
• Status: To join Verizon Wireless after merger between GTE Corp. and Bell Atlantic

Houston
Business Being Divested

• PrimeCo PCS LP's wireless operation (100%)
  
• Marketed as PrimeCo PCS
  
• CDMA digital standard
  
• Status: PrimeCo PCS LP has signed agreement to sell business to AT&T

Business Being Retained

• GTE Wireless operation
  
• Marketed as GTE Wireless
  
• CDMA digital standard
  
• Status: To join Verizon Wireless after merger between GTE Corp. and Bell Atlantic
  
• Note: 10 MHz of PCS spectrum to be retained from PrimeCo operation

San Diego
Business Being Divested

• GTE Wireless operation (100%)
  
• Marketed as GTE Wireless
  
• CDMA digital standard
  
• Status: GTE has signed agreement to sell business to AT&T

Business Being Retained

• Former Vodafone AirTouch wireless operation
  
• Marketed as Verizon Wireless
  
• CDMA digital standard
  
• Status: Officially became part of Verizon Wireless on April 3, 2000

Edited by Ellen Jensen