Bell Atlantic increases ownership in booming Italian wireless market
US-based company boosts international wireless portfolio value
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Philadelphia, Pa. -- With Italy representing the world's fifth largest economy, and estimates of total wireless penetration exceeding 17 percent (or 9.7 million customers) by the year 2000, Bell Atlantic (NYSE:BEL) will increase its ownership in Omnitel, one of that country's two cellular providers. Bell Atlantic will acquire an additional 5.8 percent of Omnitel from Olivetti, making Bell Atlantic the second largest Omnitel shareholder at 17.4 percent.
Bell Atlantic and Olivetti said the deal will close before the end of this year.
"We're excited about the opportunity to take an even greater ownership interest in Omnitel, a business with so much growth potential," said Bell Atlantic International Wireless President and CEO Tom Bartlett.
Since beginning service in Italy in December 1995, Omnitel has posted world-record growth, expecting to capture more than 700,000 customers in its first year of service. The digital cellular operator expects to turn cash positive in 1998.
Omnitel represents one of Bell Atlantic's four wireless markets outside America which comprise an international portfolio of 37 million POPs, or potential customers, in Europe and Latin America. During 1996, Bell Atlantic more than doubled its proportionate international customers, bringing its total to approximately 250,000 customers. Bell Atlantic's purchase of additional equity in Omnitel will add 3.3 million POPs to its international wireless portfolio.
"With a strong management team and solid partners, Bell Atlantic has taken another step in creating value in its wireless international portfolio," said Bartlett. "We believe that tremendous value can be created by investing in markets and operations where we have already demonstrated success. For instance, Omnitel has built a solid network, exceeding all coverage requirements, developed a robust distribution network, as well as a superb customer care process."
"These elements, coupled with an experienced management team, will yield market leadership."
Bell Atlantic plans to merge with NYNEX early in 1997. After the merger, the new company's wireless presence will include licensed properties in Greece, Indonesia, India, and Japan, covering a total of 185 million non-proportional POPs in the US and around the world.
With assistance from Bell Atlantic International Wireless' consulting organization, Omnitel became the first wireless business in Italy with 24-hour customer care, in-bound telemarketing, bill detail and multi-line billing, and simplified, consumer-targeted pricing. Omnitel's network coverage is expected to reach 85 percent of the country's population by the end of this year.
Bell Atlantic Corporation (NYSE: BEL) is at the forefront of the new communications, entertainment and information industry. In the mid-Atlantic region, the company is the premier provider of local telecommunications and advanced services. Globally, it is one of the largest investors in the high-growth wireless communication marketplace. Bell Atlantic also owns a substantial interest in Telecom Corporation of New Zealand and is actively developing high-growth national and international business opportunities in all phases of the industry.