Southwestern Bell to Buy Cellular Telephone Assets / for $21 Million

By Case, Patti | THE JOURNAL RECORD, September 10, 1986 | Go to article overview

Southwestern Bell to Buy Cellular Telephone Assets / for $21 Million


Case, Patti, THE JOURNAL RECORD


Southwestern Bell Corp. of St. Louis will buy the Baltimore and Washington, D.C., cellular radio telephone assets of Graphic S canning Corp. for approximately $21 million, both companies announced Tuesday.

Graphic Scanning is a Teaneck, N.J.-based telecommunications service company.

The contract, which Graphic Scanning announced it has signed, will enhance Southwestern Bell's June 30, $1.6 billion purchase of Metro Media Inc.'s cellular and paging interests, according to Lew Scott, a district manager for Southwestern Bell.

The purchase will essentially increase non-wireline partnership in the two cities by about 10 percent, he said.

"When we buy Metro Media, we will have 54.6 percent of the non-wireline partnership of Metro Media in Washington and Baltimore," said Scott. "After that goes through and after Graphic Scanning goesthrough, we'll have another 10 percent, or 64.6 percent, of the non-wireline companies in those markets."

In any given market, the Federal Communications Commission approves two providers of cellular service, Scott explained: a wireline company (that is, a telephone company) and a non-wire line company.

In Oklahoma City, Southwestern Bell Corp., through its Dallas-based subsidiary, Southwestern Bell Mobile Systems, is the wire-line company provider. However, Southwestern Bell Corp. is not considered a wire-line company outside of the five-state area it serves, and can therefore buy into the non-wire line provider service companies such as Graphic Scanning and Metro Media.

Southwestern Bell Corp. serves Oklahoma, Texas, Missouri, Arkansas and Kansas.

"Any of the providers can be made up of several partners," Scott said.

Southwestern Bell is acquiring Metro Media's percentage of the non-wire-line partnership in each of nine markets, Scott said. The same is true of the Graphic acquisition.

He was uncertain of what employees might be taken on in the acquisition.

Metro Media markets are Chicago; Boston; Washington, D.C.; Baltimore; Worchester, Mass.; Geary, Ind.; New York City; Philadelphia and a small interest in a company competing with Southwestern Bell wireline service in Dallas. That asset will have to be sold, Scott said.

Of all the Bell regional operating companies spun off in the 1984 divestiture of American Telephone and Telegraph, Southwestern Bell appears to have taken the cellular telephone industry most seriously. …

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