Date: 5 Nov 92 21:36:20 GMT
From: ehopper@attmail.com
Newsgroups: comp.dcom.telecom
Subject: AT&T and McCaw: Press Release via AT&T TODAY (11-4
Organization: TELECOM Digest
X-Submissions-To: telecom@eecs.nwu.edu
X-Administrivia-To: telecom-request@eecs.nwu.edu
X-Telecom-Digest: Volume 12, Issue 824, Message 1 of 9

Wednesday, November 4, 1992 -- 4:00 p.m. EST 
         
        AT&T NEGOTIATING STRATEGIC ALLIANCE WITH MCCAW TO EXPAND 
                WIRELESS COMMUNICATIONS IN NORTH AMERICA
         
     AT&T and McCaw Cellular Communications, Inc., today announced
they are negotiating a strategic alliance that will involve broad
marketing and technological cooperation in wireless communications.

     Under the proposed agreement, AT&T will make a $2 billion
investment in new McCaw shares for 19% ownership of the cellular
services company.  AT&T also will purchase British Telecom's shares in
McCaw and purchase an option from McCaw that would eventually allow
AT&T to acquire voting control of the company.  The entire investment
is valued at about $3.8 billion.

     "I am excited about the prospect of this alliance," said AT&T
Chairman Bob Allen.  "It would stimulate more growth in our long-
distance business and propel us into the fastest-growing segment of
our industry.  We respect the value of an entrepreneurial company like
McCaw and its importance in pioneering new ideas and bringing them to
fruition.  We intend to take full advantage of that entrepreneurial
spirit as we work with them to speed the day when people can
communicate anytime from anywhere.

     "We are committed," Allen said, "to working with the whole
industry to accelerate growth, add new services and serve customers
even better."

     Wireless communications is the fastest-growing segment of the
telecommunications industry, expanding at a rate of 30% to 40% a year.
It includes cellular telephones, paging and mobile data services.

     AT&T has always maintained leadership positions in wireless
communications, starting with its pioneering of mobile radio research
in the '20s and '30s.  Today, AT&T Network Systems is the largest
domestic provider of wireless network equipment; AT&T Consumer
Products is establishing a growing presence in cellular telephones and
wireless products for consumers; NCR, an AT&T subsidiary, is a
competitive force in wireless LANs and other data products; and AT&T
EasyLink's global messaging services can be delivered via wireless.

     In the agreement being negotiated, AT&T would grant McCaw a
long-term license to use the AT&T brand name in marketing wireless
services in North America.  McCaw would also gain access to AT&T's
marketing, sales, customer service and distribution channels, as well
as the research and development capabilities of AT&T Bell
Laboratories.

     "American companies are frequently criticized for being too
short-term focused and concerned only with the next quarterly earnings
report," said Vic Pelson, president of AT&T's Communications Services
Group.  "This alliance with McCaw reflects a commitment to the
long-term health of AT&T.  We strongly believe that it's necessary for
AT&T to have a major position in wireless markets and technologies in
the future if we are to remain the world's leading communications
company."

     McCaw Cellular is the largest cellular service provider in the
U.S. and is developing and marketing a range of wireless
communications services, including a cellular network that spans the
continent and is capable of transmitting voice and data
communications.

     McCaw Cellular owns a 52% interest in LIN BROADCASTING Co., which
is engaged in cellular telephone operations, television broadcasting
and specialty publishing.  It also has a 32% stake in American Mobile
Satellite Corporation, which is developing a satellite-based
communications network to provide personal communications services to
remote areas of North America now out of reach of terrestrial
communications systems, and a 51% stake in Claircom, Inc., a joint
venture with Hughes Network System, which is licensed to provide
telephone service to commercial and private aircraft.  McCaw Cellular
is the nation's fifth-largest paging service provider.

     The alliance with McCaw will help speed the development of the
first seamless wireless communications network to operate nationwide.
A conservative prediction is that 15% to 20% of Americans will use
wireless services by the year 2000.  The telecommunications provider
who can serve their needs with complete satisfaction has much to gain.
That's true not only on the consumer side, but in business, where
competition in wireless is heating up.

     "Our potential alliance would provide McCaw Cellular with added
resources to take advantage of the wealth of emerging business
opportunities in wireless communications, enabling us to accomplish
more for our employees, shareholders and customers," said McCaw
Cellular's CEO Craig McCaw.  "The alliance would bring U.S. businesses
and an increasingly broad base of consumers a whole new level of
products and services, increasing productivity across a range of
industries and helping America compete in the global marketplace."

     As part of the alliance, AT&T would purchase 47 million newly
issued shares of McCaw's common stock at $42 per share.  British
Telecom, which owns 35.8 million shares of McCaw's Class A and Class B
stock, would sell its interest to AT&T for $49 per share.  The sale is
subject to approval by BT's Board of Directors.  BT currently is
represented on McCaw Cellular's Board of Directors and has other
shareowner rights.

     AT&T's purchase of BT's shares would bring the average price per
share paid by AT&T for new McCaw and existing BT shares to $45, giving
AT&T about 33% ownership of McCaw Cellular.  AT&T would receive the
right to designate three members of McCaw's Board of Directors, with
McCaw's management team staying in place and remaining independent.

     The proposed transaction also would enable AT&T to purchase an
option from the controlling shareholders of McCaw Cellular to acquire
voting control.  AT&T would pay $100 million for the option, and an
additional $600 million, if the option is exercised.  This option
would give AT&T a majority of seats on the board.

     "The importance of this alliance to AT&T lies in its contribution
to our overall vision as a corporation," said Allen.  "That vision is
to be the world's best at bringing people together and giving them
easy access to the information and services they want -- anytime,
anywhere.  And it certainly means being a leader in cellular
services."