October 10, 1995
NYNEX CONTACT: Media Relations,
AirTouch and U S West Announce Joint Venture Close; New Management
WALNUT CREEK, CA -- AirTouch
Communications (NYSE:ATI) and U S WEST (NYSE:USW) today moved
a step closer to a merger of their domestic cellular operations.
The companies operate in 16 of the nation's top 30 markets, an
area populated by nearly 55 million people.
Effective November 1, the companies will enter the first phase
of their joint venture, Phase I.
During this phase, the companies' Wireless Management Company
(WMC), formed to serve as a single management resource, will begin
providing support services to both companies' domestic cellular
operations, which will remain separately owned during this phase.
Phase I follows the completion of contractual agreements between
the two partners, regulatory approvals, and U S WEST's exchange
of its San Diego cellular property for several GTE cellular
properties including Portland, Oregon. AirTouch and U S WEST
initially announced joint venture and merger plans on July 25,
1994, adopting a phased approach.
The next phase, Phase II, will be a merger of the two companies'
domestic cellular operations into the WMC. This will take place
upon the earlier of July 25, 1998, the lifting of certain regulatory
restrictions imposed on U S WEST in connection with the breakup
of the Bell System, or at AirTouch's option.
"We hope Congress provides legislative relief this year
so that AirTouch, U S WEST and our customers can fully realize
the benefits of scale and scope from merging our operations,"
said Lee Cox, president and chief executive officer of the joint
"U S WEST and AirTouch share a strategic vision, operating
philosophy, and management approach," said Jan Peters, president
of Wireless Operations and Investments for the U S WEST Media
Group and CEO of its cellular business U S WEST NewVector. "This
partnership will enable us to effectively pool our resources and
wireless operating expertise as well as strengthen our competitive
STRONG MANAGEMENT TEAM NAMED
A strong team of 14 veteran cellular operating management and
staff professionals hold key management posts in the joint venture.
"We've built a largely decentralized organization designed
to put accountability and decision-making into the hands of the
employees who are closest to our customers," explained Cox.
"This team has an impressive track record for running cellular
ventures and will provide continuity for our customers and employees,"
An experienced team of seasoned executives hold senior staff
positions in the WMC. They include Craig Farrill, chief technology
officer; Ujjal Kohli, vice president of marketing; Mike Polosky,
chief information and process engineering officer; Dick Hegstrom,
vice president of finance, Tracey Borst, vice president of human
resources; and Wally Sleeth, vice president of legal.
Six executives currently have responsibility for the day-to-day
domestic cellular operations that serve more than three million
customers across the country. From AirTouch Cellular, reporting
to Lee Cox, are Brian R. Jones, executive vice president and
general manager (EVP/GM) for Los Angeles; Gary Schindler, VP/GM
for Sacramento; Nancy Hobbs, VP/GM for San Diego; and Terry Tindel,
VP/GM for Atlanta. Reporting to Jan Peters are U S WEST's Tim
Samples, area general manager for the Southwest region, and Julie
Berg, vice president - marketing, distribution, and customer operations,
who has responsibility for all other NewVector markets.
Jan Peters, in addition to her role as CEO for U S WEST NewVector,
has been promoted to the additional position of president - Wireless
Operations and Investments for the U S WEST Media Group. In her
new role, Peters will oversee both U S WEST's joint venture with
AirTouch including their 50/50 partnership in PCS PrimeCo, and
the national alliance that includes Bell Atlantic NYNEX
When merged in Phase II, AirTouch and U S WEST will hold interests
of approximately 70 and 30 percent, respectively, in the combined
cellular properties. During Phase II, both companies will report
the combined operating results of the WMC, reflecting their portion
of the venture, using the equity method of accounting. In the
future, U S WEST also has the option to exchange its interest
in the WMC for an equity interest in AirTouch that would permit
representation on the AirTouch board of directors.
As a result of the Phase II merger, it is possible that AirTouch
could experience some short-term earnings dilution, which could
be material, depending on when the merger occurs. AirTouch also
may experience some near-term, minor earnings impact prior to
the Phase II merger as a result of entering into the support relationship(a).
In the future, but no earlier than the closing of the Phase
II merger, the two companies' equally-owned PCS partnership also
will be contributed to the WMC. When the PCS partnership is contributed,
AirTouch's proportional PCS expenses will increase to reflect
its adjusted ownership interest in the WMC. AirTouch expects
the PCS partnership will have significant capital requirements
for the buildout of PCS markets and will experience substantial
operating losses associated with the start-up phase of the PCS
business which is expected to last several years.
AirTouch Communications is a global wireless communications
company, with interests in cellular, paging, personal communications
services, the Globalstar satellite system and other operations
in the United States and twelve other nations: Belgium, Canada,
France, Germany, India, Italy, Japan, Portugal, South Korea, Spain,
Sweden and Thailand. The company, based in San Francisco, serves
more than 4.2 million customers worldwide.
U S WEST, headquartered in Englewood, Colorado, is in the connections
business, helping customers share information, entertainment and
communications services in local markets worldwide. It offers
domestic cellular service through its subsidiary, U S WEST NewVector,
which operates in 13 midwestern, western and southwestern states
and serves more than 1,000,000 customers. The company also operates
wireless communication systems, cable TV and telephone networks
in the United Kingdom, Hungary, the Czech Republic, Slovakia and
Russia, France, Norway, Sweden and Lithuania. (a) Refer to AirTouch
Form 8-K filed today with the Securities and Exchange Commission
for more information regarding the effects of Phase I and Phase
II. You may also contact AirTouch for a copy of the report.
NYNEX is a global communications and media company that provides
a full range of services in the northeastern United States and
high-growth markets around the world, including the United Kingdom,
Thailand, Gibraltar, Greece, Indonesia, the Philippines, Poland,
Slovakia and the Czech Republic.
The Corporation is a leader in the telecommunications, wireless communications,
cable television, directory publishing
and entertainment and information services.
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