The long-awaited venture will dwarf AT&T's wireless service in number of regions. The deal could also spur consolidation in the sector as more companies try to create national networks, an AT&T senior wireless executive said.
"I think all significant wireless carriers are going to have to have a significant national footprint in the relatively near future," said Jordan Roderick, executive vice president for wireless products and technology in AT&T's wireless services unit.
The joint venture will enable Vodafone and Bell Atlantic to offer a "a much more competitive service package," especially to corporate customers, he said.
"This is part of an ongoing consolidation and I think there will be more," Roderick added. The companies "can offer nationwide service to corporate customers, which is one of their reasons for the merger in the first place."
Kevin Roe, an analyst with ABN Amro, called the joining of forces "a fantastic deal."
The two companies will have the scale to be able to create competitive pricing plans, especially for corporate customers, and drive down equipment costs, he said.
Bob Wilkes, an analyst at Brown Brothers Harriman, said the Vodafone move was part of a long series of mergers among jostling telecommunications heavyweights.
He added that BellSouth and Ameritech could be among potential future partners, since they share CDMA technology. CDMA stands for code division multiple access and is one of the digital mobile phone systems.
The Bell Atlantic-Vodafone merger would create easily the biggest U.S. mobile phone network, with 20 million customers. AT&T has about 11 million customers, and Sprint PCS Group, the next-largest system, has about 4 million.
Bell Atlantic will own 55 percent of the new company and Vodafone will own the rest.
The network that Vodafone inherited in its $62 billion takeover of San Francisco's AirTouch in January covers most of the U.S. western states. Bell's system covers most of the East coast.
Bell Atlantic and Britain's Vodafone said they would fuse their U.S. wireless businesses in a joint venture worth more than $70 billion.
Story Copyright © 1999 Reuters Limited. All rights reserved.
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