Industry News

AirTouch and MediaOne Group Complete $6 Billion Merger of U.S. Wireless interests

AirTouch Becomes Second Largest U.S. Wireless Provider; MediaOne Group to Focus on Core Broadband Strategy with Strengthened Balance Sheet

SAN FRANCISCO, April 6, 1998 -- AirTouch Communications Inc. and MediaOne Group, formerly US WEST Media Group, today announced that they have completed merging MediaOne Group's U.S. cellular and PCS interests into AirTouch. The merger became effective on April 6 . MediaOne Group's international wireless interests are not included in the transaction.

This acquisition increases AirTouch's U.S. cellular and PCS proportionate customer base by 56 percent, to 6.9 million, making the company the second largest wireless provider in the United States based on fourth quarter 1997 proportionate customers. With the transaction, AirTouch adds about $400 million of 1997 proforma proportionate operating cash flow.

The total value of the deal is $5.9 billion. Due to the strong performance of AirTouch common stock, the transaction's value has increased by about $200 million since the deal was announced on Jan. 29, 1998. MediaOne Group received approximately $1.6 billion in AirTouch dividend-bearing preferred stock with a 5.143 percent coupon and 59.5 million shares of AirTouch common stock valued at $2.9 billion, based on the April 3 closing price of $49 per share. MediaOne Group transferred approximately $1.4 billion of debt to AirTouch.

"We've been working toward this strategically important acquisition since 1994, and we're delighted to reach a successful conclusion," said Sam Ginn, AirTouch chairman and CEO. "The merger combines the expertise of two industry leaders, while strengthening AirTouch's competitive position by increasing our scale and reach. As the demand for wireless soars, we plan to remain in the forefront, with new products and services to help customers balance their lives."

"The completion of this merger with AirTouch marks a major milestone for MediaOne Group. We now can focus our resources more closely on our core businesses -- domestic and international broadband, and international wireless," said Chuck Lillis, president and CEO of MediaOne Group. "The deal also strengthens our balance sheet as we prepare to become a standalone company," Lillis said. AirTouch has acquired MediaOne Group's U.S. cellular property, U S WEST NewVector Group, and its interest in PCS provider PrimeCo Personal Communications. AirTouch now has cellular operations in 19 states including 15 of the top 30 U.S. markets: Los Angeles, Detroit, San Francisco, Atlanta, San Diego, Minneapolis, Phoenix, Seattle, Denver, Cleveland, Portland (Oregon), San Jose, Kansas City, Cincinnati, and Sacramento.

The transaction increases the company's ownership in PrimeCo from approximately 25 to 50 percent. AirTouch's cellular and PCS footprint now covers cities in 25 states, reaching a total of 145 million people -- over half the U.S. population.

Bell Atlantic Mobile Expands Digital Wireless Phone Service

New, Lower Priced Service Plans Now Available Most Advance Technology Arrives in Danbury and Waterbury Along I84

WALLINGFORD, Conn., April 6, 1998 -- Bell Atlantic Mobile announced today that it has expanded digital wireless phone service in Danbury and Waterbury along the I84 corridor to the New York State border and has made its service more affordable by lowering per minute rates by up to 20 percent on digital plans.

The service, called DigitalChoice(SM), allows customers to make and receive calls, answer pages, receive voice mail and know who is calling -- all while providing increased call reliability, greater voice clarity, enhanced privacy, and extended portable phone battery life. Customers can use their digital phones virtually anywhere in the United States because Bell Atlantic Mobile wireless service works on both analog (traditional cellular) and compatible digital networks.

"We've distinguished ourselves from the competition by building the most expansive, high quality digital network in the Northeast," said Bob Stott, president of the Northeast Region of Bell Atlantic Mobile. "We've also re-aligned our pricing structure to encourage current analog customers to convert to digital and for new customers to choose digital. If consumers were hesitant before, there's no reason to be now. We've made digital more affordable for all consumers."

Bell Atlantic Mobile bases DigitalChoice on Code Division Multiple Access (CDMA) technology and is the industry leader in deploying CDMA service. This "next generation" wireless technology greatly reduces static and crosstalk and uses a unique noise suppression technique that improves voice quality. It also allows for greater call capacity on Bell Atlantic Mobile's network. For more information, call 1-800-255-BELL.

Vendor News

Telesp Cellular Opened bids for Proposals for 1 million Cellular Digital Lines

Sao Paulo, Brazil - TELESP Cellular opened a call for bids today for proposals for 1 million cellular digital lines. NEC do Brasil, which already won TELRJ's bid, came in again with the lowest bid per line: R$131.28 (US$120), when compared with their competitors: Alcatel, Batik/Samsung, Ericsson, Lucent and Motorola

"Since 1993, NEC do Brasil has been TELESP's most prominent analog cellular equipment provider (more than 260 cell sites installed in the state of Sao Paulo). Our goal is to be TELESP's most prominent digital cellular equipment provider as well," commented Mr. William Nolasco Barreto, Director of the Wireless Business Unit, NEC do Brasil. "Our objective is to strengthen our partnership with TELESP in order to provide users better quality services through state-of-the-are technology."

NEC do Brasil believes that its CDMA Mobile Cellular System is the best technology for Sao Paulo. Sao Paulo is the most important cellular market in Latin America, with 4 million people who use cellular phones.

NEC's CDMA Cellular Mobile System's superior technological features provide several advantages to operators and users:

• Larger Capacity Sigma Switch
• A complete family of Base Transceiver Stations (Macro, Mini, Micro and Pico-Outdoor and Indoor Configurations) that accommodate different traffic and coverage needs
• Centralized operations, administration and maintenance - providing greater operational and cost efficiency
• Enhanced reliability with centralized HLR Excellent voice quality and inherent privacy

NEC do Brasil has already signed two significant contracts to supply CDMA cellular mobile systems in Brazil: one if the state of Rio de Janeiro (150,000 lines) and the other in the state of Bahia (25,000 lines).

TELESP is the regional 800 MHz A-band cellular operator in Sao Paulo. TELESP provides telecommunications services to almost 34 million people.

Motorola CIG Supplies China's First Large-Scale Commercial CDMA Wireless Local Loop System

ARLINGTON HEIGHTS, Ill., April 16, 1998 -- Motorola, Inc.'s Cellular Infrastructure Group (CIG) announced today it has won a commercial contract to expand the Code Division Multiple Access (CDMA) digital wireless local loop system in Shanghai, China's largest metropolitan city. The system expansion, which uses Motorola CIG's WiLL (R) fixed wireless network technology, represents China's first large-scale 1.9 GHz CDMA WiLL (R) commercial contract. The value of the contract was not announced.

Motorola CIG installed the Shanghai CDMA WiLL(R) system for trial in 1996. This expansion contract marks the formal commercialization of the digital system. The CDMA WiLL(R) system, operating at 1.9 GHz, covers all of urban Shanghai, the WiLL system is targeted for residents on the city's telephone waiting list, small and home office users and business subscribers.

"Motorola CIG is proud to be the first to supply a large-scale 1.9 GHz CDMA wireless local loop commercial system in China," said Tom Hinton, vice president and general manager of Motorola CIG's Greater China Cellular Infrastructure Division. "Motorola CIG's CDMA WiLL(R)system offers telephone operators like Shanghai PTA a quality digital network with capacity for future growth that can be easily integrated into the landline network and deployed within weeks of equipment delivery -far more quickly than traditional landline installations.

Under the contract with Shanghai Posts & Telecommunications Administration (Shanghai PTA), Motorola CIG will deploy additional fixed Wireless Terminals (FWTs) and SC™4852 base stations for the expansion of the CDMA WiLL(R) system. Full deployment is scheduled for completion by the end of June, when the overall capacity of the system will increase to 10,000 subscribers.

The WiLL(R) system from Motorola CIG can provide the operator with tremendous benefits for timely and cost-effective installation. This is particularly important for Shanghai, a city with a total population of 14 million, where phenomenal economic growth spurs an increase in telephone subscribers and residential uprooting makes wireline infrastructure less attractive.

NEC Do Brasil Beats The Competition For An Important Brazilian Phone Bid

April 10, 1998 -- NEC has landed an order for a CDMA-format cellular phone system from Telebahia, a regional phone company in eastern Brazil. The order is worth about 5 billion yen for parent NEC and about 25 billion yen for the NEC Group, including NEC Brazil, based in Sao Paulo. The order, a system based on IS95, includes the configuration of a network comprising base stations, control units and exchanges. Initially, the system will cover about 25,000 subscribers on the 1.25 MHz band. Then, Telebahia will switch the current 25,000 analog subscribers over to digital.

QUALCOMM Awarded $117 Million Contract for QUALCOMM Satellite Telephones

QUALCOMM CDMA Telephones to Operate on the Globalstar Communications System

SAN DIEGO, April 3, 1998 -- QUALCOMM Incorporated announced today that QUALCOMM has entered into a $117 million contract with Globalstar, L.P. and Globalstar Service Providers to manufacture and supply portable and fixed Code Division Multiple Access (CDMA) telephones that will operate on Globalstar's worldwide low-Earth-orbit (LEO) satellite-based digital telecommunications system. Under the contract, QUALCOMM will also deliver vehicle kits that will allow hands-free operation from within a vehicle.

"This represents another major milestone in QUALCOMM's support of Globalstar™ as both a strategic partner and supplier of User Terminals and Gateways," said Gerald Beckwith, president of QUALCOMM's Communications Systems Division.

"By providing portable telephones that function in three operating modes to the subscriber base, we have assured the most direct and least expensive means of connection for the caller. The satellite mode of operation frees users from the need to be in close proximity to a terrestrial base station in order to communicate."

QUALCOMM's Globalstar tri-mode portable telephone will provide access to the Globalstar network around the world, as well as access to cellular networks using CDMA technology or analog AMPS technology.

The tri-mode telephone is designed to provide maximum choice of wireless access to telecommunications networks. Interoperability between the Globalstar system and cellular companies is assured while the subscriber maintains a single telephone number and a convenient single point for billing.

QUALCOMM's Globalstar fixed telephone offers an innovative solution for the quick and efficient installation of a communications link for remote areas, while avoiding the cost and time necessary to interconnect using traditional wire or terrestrial wireless systems. QUALCOMM's Globalstar fixed telephone delivers a wireless solution for providing the "last mile" of connectivity with the terrestrial telephone network.

The $2.7 billion Globalstar system, comprised of 48 LEO satellites and a global network of ground stations, will allow people around the world to make or receive calls using hand-held, vehicle-mounted and fixed-site terminals.

Globalstar will also provide data transmission, fax and position location services. The first four Globalstar satellites were successfully launched on February 14, 1998. The next launch of four satellites is scheduled for April 23, 1998. Globalstar expects to launch a total of 44 satellites by the end of the year.