Bell Atlantic and Nynex agree dollars 13bn cellular operations merger

THE TWO regional telephone companies that service the US east coast agreed yesterday to merge their cellular operations, creating a dollars 13bn ( pounds 8.4bn) company that will rival AT&T's McCaw Cellular.

Bell Atlantic and Nynex, which serve 55 million customers in cities like New York and Philadelphia, would combine their cell- phone operations as a step towards establishing a nationwide wireless service. The merger would create a third big national player, competing with McCaw, which AT&T is buying for dollars 12.6bn, and with GTE Corp's cellular division.

McCaw, with 2 million subscribers, serves a market with 60 million potential customers. GTE's coverage area is slightly smaller.

Bell and Nynex will also pool their applications for personal- communications service licences to be distributed by the Federal Communications Commission later this year. The combination represents a serious PCS rival to Nextel, a national wireless group controlled by BT's American partner, MCI.

In another merger, Santa Fe Pacific, the holding company for the Santa Fe and Union Pacific railroads, will merge with Texas- based Burlington Northern to create America's largest railway in a dollars 2.5bn exchange of shares.

The merger brings together two large regional rail networks, offering shippers single-line service stretching across the lower US from California to the American South. There is almost no overlap between the two systems, meaning the deal should win regulatory approval, although this could take as long as three years.