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MCI, 2 Baby Bells Reportedly in Talks for Joint Wireless Bids

October 14, 1994|From Reuters

NEW YORK — MCI Communications Corp. is in talks with regional Bell companies Bell Atlantic Corp. and Nynex Corp. about joint bids for wireless licenses being auctioned in December, sources said Thursday.

Though talks with MCI were "substantive," it would be premature to rule out Sprint Corp. as an ally of the two Baby Bells as well, said the sources, who declined to be identified.

"Things are moving so rapidly, the talks are turning on dimes," one of the sources said.

Spokesmen at each company declined to comment.

The federal government will hold the "personal communications systems" auction in December to sell off frequencies now used for taxi dispatch and similar purposes.

With modern technology, these frequencies can be used to build networks of mobile phones, which have the features of cellular phones.

For both MCI and Sprint, each of which has little in the way of mobile communications assets, this will be a vital opportunity to build a national network to rival AT&T Co.'s following its $11.5-billion takeover of McCaw Cellular Communications.

But with industry estimates that up to $30 billion may be thrown into the ring to win the available frequencies, even the big long-distance carriers need deep-pocketed allies to share the cost.

Bell Atlantic and Nynex are already in the process of merging their wireless licenses, which run along an essentially unbroken corridor from Boston to Washington in an area with 25% of the nation's population.

For MCI, an alliance would mean access to the Baby Bells' substantial cash reserves and would allow that money to be targeted at less expensive, less densely populated areas outside existing license areas.

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