Vodafone closes in on American giant
Sunday 10 January 1999
With MCI WorldCom ruling itself out of the bidding on Friday afternoon, that left only Bell Atlantic, the company that put AirTouch into play with a New Year's Eve $45bn all-stock bid, in the running against Vodafone.
There have been rumours that the three companies might get together. One notion is that Vodafone would spin off AirTouch's US operations to Bell Atlantic after completing its deal for the company, which has extensive operations in the parts of Europe where Vodafone is absent.
A second notion is that the newly merged Anglo-American mobile phone company, VodaTouch, might enter into a joint venture with Bell Atlantic to offer a combination of fixed-wire and wireless telecommunications services.
But on Friday, a Vodafone spokesman downplayed talk of a three-way deal. "We may not have been interested in the US in the past," he said. "But we are interested now, because our European businesses are more mature. We have made a bid for the whole of AirTouch, including its US operations."
Andrew Webber, a telecoms analyst at management consultants Arthur D Little in London, endorses AirTouch's take-all strategy. The fit between the two companies begins, he says, with the fact that there is almost no overlap between their European operations. "Together, they have the second [largest mobile phone operation] in almost every European country," he says, "with 20 to 30 per cent of the market in each."
But a total merger between the two companies makes most sense, Mr Webber continues, when you look into the future. A transatlantic company offering one mobile phone service to businessmen would be attractive - although, Mr Webber adds: "The best mobile phone customers are not executives, they are jobbing builders and plumbers using their mobiles all day long."
The real benefits of a merger, he concludes, will only become apparent when the next generation of mobile phones comes along, allowing users to link into data transmission devices.
"Then you could imagine VodaTouch being the logical phone company to sign deals with Microsoft and Disney or News Corp," he says.
The price Vodafone is prepared to pay is high, according to analysts. It represents a premium of 50 per cent over the stock market value of the San Francisco-based company before Bell Atlantic made its bid.
But, suggests Dresdner Kleinwort Benson analyst James Dodd, wireless is shaping up to be the hot area of the hot telecoms industry in 1999.
- 1 Alan Rickman admits editing 'terrible' script with friends in Pizza Hut behind backs of writers on Robin Hood: Prince of Thieves
- 2 Rarest Beanie Baby of them all could be sold for £62,500 on eBay
- 3 Professional big game hunter Ian Gibson crushed to death by elephant during hunt
- 4 Farmer told to tear down mock-Tudor castle after hiding construction behind hay bales
- 5 Rebecca Francis accuses Ricky Gervais of using 'influence' to target female hunters after receiving barrage of death threats
Yemen crisis: Meet the child soldiers who have forsaken books for Kalashnikovs
Alan Rickman admits editing 'terrible' script with friends in Pizza Hut behind backs of writers on Robin Hood: Prince of Thieves
Rarest Beanie Baby of them all could be sold for £62,500 on eBay
Professional big game hunter Ian Gibson crushed to death by elephant during hunt
Farmer told to tear down mock-Tudor castle after hiding construction behind hay bales
If I’m being racially abused I don’t need a stranger with a saviour complex to rescue me
The only black face in the Ukip manifesto is on the page about overseas aid
Ukip is the only main political party to not address LGBT rights in its manifesto
Food banks: One million Britons will soon be using them, according to Trussell Trust
Religion isn't growing, it is becoming vigorous in its demise, says philosopher AC Grayling
BBC election debate: The one photo that summed up the whole 90-minute leaders debate
iJobs Money & Business
£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...
£50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...
£13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...
£40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...