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February 28, 1994

MCI WINS US-WIDE WIRELESS COVERAGE IN NEXTEL DEAL

By CBR Staff Writer

MCI Communications Corp’s plans to become a major player in Personal Communications Services and other wireless telecommunications took a big step forward yesterday when it announced that it plans to invest $1,300m all told in Nextel Communications Inc, where cable television operator Comcast Corp is already an investor – as is Motorola Inc, which exchanged its Specialised Mobile Radio properties for a stake in Nextel formerly Fleet Call – last year (CI No 2,294). Rutherford, New Jersey-based Nextel operates a US-wide Specialised Mobile Radio network for despatch services such as taxis and couriers, but is in process of turning its network into a nationwide phone service reaching hundreds of US markets in competition with cellular service providers. The move for Nextel, signalled here last year when MCI was outlining its revised plans for Personal Communications Services (CI No 2,268) is seen as MCI’s networkMCI answer to AT&T Co’s plans to buy McCaw Cellular Communications Inc. According to the Wall Street Journal, MCI was also close to signing an alliance with Tele-Communications Inc before the Englewood, Colorado cable television leader agreed its failed deal to be acquired by Bell Atlantic Corp, so MCI may now reopen those talks. The wireless and cable initiatives are part of MCI’s networkMCI initiative to use the cash it expects to get for British Telecommunications Plc’s planned 20% stake to invade the local loop in competition with the regional Baby Bells. MCI is initially buying 22m shares – a 17% stake – and is committed to buying 15m more shares at an average $38 a share, taking its stake to an indicated 28.59% and its investment to $1,300m. The service will be jointly marketed by MCI, Nextel and Comcast under the MCI brand name. Nextel’s licence coverage and agreements with other cellular operators will enable the alliance to reach 95% of the US population, the partners say. As well as operating cable television networks, Philadelphia-based Comcast holds cellular businesses in the Northeast US.

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