AT&T Wireless Said Eyeing Nextel
Friday, September 8th 2000, 12:00 am
By: News On 6
NEW YORK (AP) â€” AT&T Wireless may propose a buyout of mobile phone rival Nextel Communications at an AT&T board meeting later this month in a bid to shine new light on one of AT&T's few bright spots, The Wall Street Journal reported Thursday.
The board meeting is also expected to include discussion of other strategic options for the overall company, including a potential merger with British Telecommunications, another struggling giant, or a possible spinoff of AT&T's long-distance business, the Journal said, citing people familiar with the matter.
According to the report, one source told the Journal that talks with BT have recently picked up steam, though the two sides have yet to discuss specific terms.
Meanwhile, in addition to Nextel, AT&T Wireless might also try to merge operations with several mobile phone carriers in Europe and at least one Japanese concern, the report said.
A spokesman for AT&T refused to comment on the reports Thursday. A spokesman for Nextel also would not comment on the report specifically, but said his company is open to potential suitors.
``The growth of the wireless industry is attracting a lot of telecommunications and global players to the wireless sector and, as such, it's certainly in our interest to listen to anybody who is willing to talk to us,'' said Ben Banta, Nextel's vice president of corporate communications. ``We've become involved in considering various partnering opportunities and will continue to do so.''
Nextel, based in McLean, Va., has recently made it clear that it is looking for partners. In fact, the Journal also quoted well-placed sources as saying Nextel has held discussions with a number of potential buyers, including German carrier Deutsche Telekom AG and NTT DoCoMo Inc., the hugely successful wireless unit of Japan's Nippon Telegraph & Telephone Corp.
As the nation's biggest independent wireless concern, Nextel's greatest strength is a broad base of high-volume business customers, especially blue-collar operations, that rely Nextel's unique two-way radio feature for employees to communicate. Nextel also boasts a new service that allows customers traveling in most regions of the world to use one cell phone.
While the AT&T Wireless business is now represented by a separately traded tracking stock, the unit is still fully owned by AT&T and requires the parent company's consent on any major initiative.
AT&T has been besieged by troubles in recent months across most of its vast operations, especially its shrinking long-distance business and a cable TV business the company has staked its future on as the best way to deliver telephone and high-speed Internet services. Amid the growing doubt, AT&T's stock has been nearly halved since the spring.
In part, the cable strategy has fallen out of favor as the potential of wireless technology to deliver all sorts of digital services has grown. Some analysts say the mounting skepticism about the parent company has been weighing on the wireless stock
AT&T Wireless was trading Thursday at $25.25, down 43.8 cents, on the New York Stock Exchange, where shares of AT&T fell 68.8 cents to close at $30.63. Shares of Nextel were up $2.94 to close at $53 Thursday on the Nasdaq Stock Market.