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EXHIBIT 99
JULY 25, 1994
CONTACTS: Susan Rosenberg, AirTouch
510-210-3910
Lois Leach, U S WEST
303-793-6355
AIRTOUCH AND U S WEST AGREE TO MERGE CELLULAR OPERATIONS
Companies Form Wireless Joint Venture to Serve Nationwide Market
NEW YORK -- AirTouch Communications (NYSE: ATI) and U S WEST,
Inc. (NYSE: USW) today announced a definitive agreement to
combine their domestic cellular assets. The joint venture
creates a national wireless company with high-growth markets, an
experienced management team and extensive geographic reach.
By combining their cellular properties, the companies will gain a
competitive advantage through significantly increased marketing
scope and large-scale operating efficiencies. The initial equity
ownership of the cellular joint venture is 70 percent AirTouch
and 30 percent U S WEST.
Together, AirTouch and U S WEST own cellular licenses in 9 of the
top 20 U.S. markets and 16 of the top 30 markets, covering more
than 53 million potential customers (POPs). The two companies
serve more than 1.7 million cellular customers across the
country. The companies' combined cellular properties offer broad
geographic coverage, particularly in the western half of the
United States where cellular coverage stretches along the west
coast corridor from Canada to Mexico, and in most states west of
the Mississippi River. The joint venture also includes the
Atlanta area and several Midwest markets in Michigan and Ohio.
In addition to merging their domestic cellular operations, the
two companies have formed a joint venture to pursue new Personal
Communications Services (PCS) opportunities that complement
existing cellular holdings. The PCS joint venture will
participate in the upcoming FCC broadband auctions. The PCS
joint venture is owned and operated equally by the two companies.
"This partnership implements our strategy of expanding our
wireless footprint with a company that shares our commitment to
customers, shareholders and the future of the industry," said Sam
Ginn, chairman and chief executive officer of AirTouch
Communications. "Together we are a wireless powerhouse, with our
sights set on creating a national wireless operation through PCS
and other growth opportunities.
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"The wireless industry is being driven by rapidly growing
subscriber penetration, advances in technology, changes in public
policy and tremendous customer demand," he added. "As partners,
we are poised to capitalize on the window of opportunity that
will shape the landscape of the wireless industry for the next
century."
"AirTouch and U S WEST share a strategic vision, operating
philosophy and management approach, providing a strong foundation
for a successful and rewarding partnership," said Richard D.
McCormick, chairman and chief executive officer of U S WEST, Inc.
"Both companies have strong track records in terms of wireless
technology, product innovation and customer focus. By pooling
our resources and wireless operating expertise, we are well-
positioned to deliver exceptional products and services to
consumers across the country.
"Today's customers want choice in what they buy and where they
buy. The scale and scope advantages created by the joint venture
not only will immediately improve operating cash flow, they will
bring new product marketing and distribution opportunities to
deliver more choices to more customers in more places," said
McCormick. "This wireless partnership is consistent with our
philosophy that the needs of our customers and shareholders are
often best served by joining forces with other strategic
partners, like Time Warner, TeleCommunications, Inc., and Cable &
Wireless."
STRUCTURE
To allow AirTouch to continue providing interLATA wireless
services, free of Modification of Final Judgment (MFJ)
constraints, each company's cellular properties initially will
continue operating as separate entities owned by the individual
partners, but will report to a joint Wireless Management Company,
which will provide support services. U S WEST remains subject to
MFJ restrictions and cannot offer wireless interLATA services.
The Wireless Management Company, led by Lee Cox, AirTouch
Cellular president and chief executive officer, will centralize
corporate staff functions and provide support services to both
AirTouch Cellular and U S WEST Cellular on a contract basis until
the two companies fully merge their operations. It also will
provide these support services to the PCS joint venture company.
John DeFeo, president and chief executive officer of U S WEST
NewVector Group, will continue to direct U S WEST Cellular
operations and will report to Cox.
Areas where some functions initially will be consolidated include
advanced technology, external affairs, finance, headquarters
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sales and distribution, human resources, information systems,
marketing, new product development, purchasing and strategic
planning. The integrated management of these support functions
will maximize the operating efficiency of the joint venture.
A complete merger of the two companies' cellular operations will
take place upon the earlier of four years from today, the lifting
of certain MFJ restrictions or at AirTouch's option. The
definitive agreement gives U S WEST significant strategic
flexibility, including the right to convert its 30 percent
ownership position into direct ownership of AirTouch stock at
private market value upon MFJ relief and no later than 10 years
from closing.
LEADERSHIP
A Partnership Committee, led by Lee Cox and composed of three
other AirTouch representatives, three U S WEST representatives
and one mutually agreed upon independent representative, will
oversee the companies' combined domestic cellular operations as
well as the PCS joint venture. The joint venture company will be
based in Walnut Creek, Calif., near San Francisco.
Other members of the Partnership Committee include from AirTouch:
Sam Ginn; Chris Christensen, chief financial officer; Arun Sarin,
vice president-Corporate Strategy/Development and Human
Resources; and from U S WEST: Chuck Lillis, executive vice
president and chief planning officer; Steve Boyd, vice president-
Wireless Business Development; and one other officer to be named
soon. The independent member has not yet been selected.
Building on the company's experience in operating the world's
first personal communications network in the United Kingdom, U S
WEST will appoint the president of the PCS joint venture in two
to three weeks. In addition, discussions are currently in
progress with Time Warner to determine its interest in
participating in the PCS joint venture.
"This partnership is built on unparalleled management and
wireless operations and experience," said Cox. "Between us, we
have deployed and operated a vast array of cellular and PCS
systems in the U.S. and abroad. U S WEST's first-hand experience
competing against two established cellular carriers in the U.K.
will be especially valuable in our PCS joint venture. We view
this wireless experience as a pillar of strength that will give
us a competitive edge."
While the two companies' international businesses are not
included in the joint venture, both AirTouch and U S WEST remain
committed to making resources available for international
opportunities.
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NEXT STEPS
In markets where the partners own competing cellular operations,
such as San Diego, the conflicts will be eliminated. Wherever
possible, these conflicting assets will be traded for other
properties rather than sold.
The initial joint venture requires certain federal and state
regulatory approvals. The transaction is tax-free and is
expected to close in second quarter 1995.
AirTouch Communications, formerly PacTel Corporation, is involved
in cellular, paging, vehicle location and international ventures
in many of the world's top markets, including the U.S., Japan,
Germany, Sweden, France, Spain, Portugal, Belgium, Italy, South
Korea and Thailand. The company, which is based in San
Francisco, serves more than 2.7 million customers worldwide. It
was spun off from Pacific Telesis Group on April 1, 1994.
U S WEST is in the connections business, helping customers share
information, entertainment and communications services in local
markets worldwide. U S WEST's major subsidiary, U S WEST
Communications, provides services to 25 million customers in 14
western and midwestern states. U S WEST's international
businesses include cellular telephone systems in Hungary, the
Czech Republic, Slovakia and Russia; Mercury One-2-One, a
personal communications network in the United Kingdom; cable TV
and telephone networks in the U.K., France, Norway, Sweden and
Hungary; international gateway telephone switches in Russia and
Lithuania; and telephone directory operations in Poland and the
U.K.
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