AirTouch Communications and US WEST Inc. announced Monday they will combine their domestic cellular units.
AirTouch, which was spun off from Pacific Telesis Group in April and is located in Walnut Grove, Calif., will initially have 70 percent ownership of the cellular joint venture and US WEST, headquartered in Englewood, Colo., 30 percent, under terms of the definitive agreement.The two telecommunications companies serve more than 1.7 million cellular customers across the country.
The joint venture requires federal and state regulatory approvals. The deal is expected to close in the second quarter of 1995.
The two companies also will start a joint personal communications services business to complement existing cellular holdings. The PCS joint venture, owned and operated equally by the two companies, will participate in the upcoming FCC broadband auctions.
The companies said their combined cellular business covers a broad range, particularly in the western United States, stretching along the West Coast from Canada to Mexico, and in most states west of the Mississippi River. The joint venture also includes the Atlanta area and several markets in Michigan and Ohio.
US WEST Chairman and CEO Richard McCormick said the joint venture will immediately improve cash flow and distribution.
Each company's cellular units will initially continue operating separately but will report to a joint Wireless Management Co., which will provide support services. AirTouch can then continue providing interLATA wireless services, free of Modification of Final Judgment (MFJ) constraints.
US WEST remains subject to MFJ restrictions and cannot offer wireless interLATA services.
A complete merger of the two companies' cellular operations will take place upon the earlier of four years from today, the lifting of certain MFJ restrictions, or at AirTouch's option.
The joint venture company will be based in Walnut Creek, Calif., near San Francisco.
AirTouch Communications, formerly PacTel Corp., does business in cellular, paging, vehicle location and international ventures in the United States, Japan, Germany, Sweden, France, Spain, Portugal, Belgium, Italy, South Korea and Thailand.
US WEST is in the connections business. Its major subsidiary, US WEST Communications, provides services to 25 million customers in 14 western and midwestern states.