AT&T Wireless Group said today that it has signed deals with Bell Atlantic Corp., Vodafone AirTouch PLC, and GTE Corp. to buy wireless licences in San Francisco, San Diego, and Houston from those three companies for a total of $3.3 billion.
Bell Atlantic, Vodafone, and GTE decided to combine their wireless businesses into one company called Verizon Wireless. This led to the deals with AT&T. (see story). Because of the mergers, which will be finished by the end of this month when GTE’s wireless unit is added, Verizon would have had two cell phone companies in each of the three cities.
But that’s against the law at the federal level. Verizon is selling AT&T Wireless a second licence in each city so that it doesn’t get in trouble with the Federal Communications Commission. Jim Gerace, a spokesman for Bell Atlantic, said, “We had two licences in each market.” We had to let one go.
In December, the U.S. Department of Justice said that the plan to make Verizon Wireless could only go forward if the duplicate licences were sold. In San Francisco, Verizon plans to keep a licence that was previously owned by Irving, Texas-based GTE and sell a licence that was previously owned by Bell Atlantic in New York City and Vodafone in London.
GTE owned a licence in San Diego that will now be sold to AT&T. Verizon is keeping a second licence that belonged to Vodafone. In Houston, Verizon is keeping a licence owned by GTE while AT&T buys PrimeCo PCS LP, a partnership between Bell Atlantic and Vodafone.
Bell Atlantic says that the combined businesses that AT&T is going to buy serve more than 1.3 million customers. About 1,400 employees will be affected by the moves, which should be done by the end of the year.