Outlook: Have-a-go Gent follows the pack West

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The Independent Online
NOTWITHSTANDING THE bruising experience of LucasVarity, there seems to be no end of British companies willing to try their hand at a trans-Atlantic merger. There has been a whole list of them in the last few months alone, to which Chris Gent, chief executive of Vodafone, yesterday added his name.

Caught on the hop while watching the cricket in Australia, Mr Gent was last night jetting his way home to take charge of merger talks with AirTouch, one of the largest mobile telephone companies in the US. AirTouch confirmed on Sunday night that it was in talks with Bell Atlantic, so Mr Gent is going to have to move fast if the prize is not to slip from his grasp. It might reasonably be said that if Vodafone wants AirTouch so badly as to cut short Mr Gent's holiday, it should have moved a good deal sooner. It is an open secret that Vodafone has been eyeing the company for at least a year, so why wait for a rival suitor to arrive on the scene before making a move? In an auction, Vodafone presumably cannot hope to win against the fire power of Bell Atlantic.

Vodafone and AirTouch certainly seem to make a perfect fit geographically. There are also good cost savings to be had in procurement and elsewhere, but they surely cannot be as big as those that an existing US operator such as Bell Atlantic can achieve? And since Vodafone is not in a position to offer much in the way of cash, are the Americans really going to be that keen on its paper?

The belief that they might be lies in the view that the future of telecommunications is largely wireless - that mobile operators will progressively dominate voice telephony. Naturally, Mr Gent is very much of this view and he has so far refused to contemplate the "pollution" of Vodafone with anything as old fashioned as fixed line telephony, whatever its advantages in broadband communications. Vodafone and AirTouch combined would be easily the biggest mobile operator in the world, with 26 million existing subscribers and a finger in a huge array of different national markets. So who knows? If convinced that AirVodafone is a more likely growth stock than BellAir, those crazy Americans might just buy it. However, it scarcely needs saying that it is not going to be easy.

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