A.M. Report; Sprint, MCI back MMDS – Sprint to purchase American Telecasting, MCI WorldCom to buy CAI Wireless

A.M. Report; Sprint, MCI back MMDS – Sprint to purchase American Telecasting, MCI WorldCom to buy CAI Wireless – Company Business and Marketing

Nancy Gohring

Multichannel multipoint distribution system property is hot. Last week Sprint announced plans to buy American Telecasting Inc., an owner of MMDS licenses that cover 55 markets and 10 million households.

Sprint has agreed to spend $167.8 million for 25.8 million shares of ATI stock. As part of the deal, within 20 days after April 26 ATI could strike a deal with another suitor, although Sprint would be given the opportunity to counter-bid.

Along with property acquired as part of Sprint’s recently announced intent to merge with People’s Choice TV, the spectrum will be used as one of many access methods that make up Sprint’s Integrated On-demand Network offering, said a Sprint spokesman. Combined, licenses from ATI and PCTV cover 65 markets in the West, the Plains states and the Midwest.

Meanwhile, CAI Wireless, which agreed to be bought by MCI WorldCom for $24 per share, received an unsolicited offer for $28 per share. MCI WorldCom upped the ante last week to match that $28 and executed a definitive agreement and plan of merger with CAI Wireless. Some rumors have Craig McCaw backing that unsolicited offer, while Sprint could also be a logical bidder.

MCI Worldcom and Sprint will likely use the MMDS spectrum to offer Internet services, bypassing local operators.

Which MMDS operator will be next in this race to buy markets? Wireless One and Heartland are two other MMDS companies that might be looking for suitors.

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