Feb 13, 2004 12:00 PM,

AT&T Wireless bidding: Vodafone in, NTT out

By Dan O’Shea

Closing in on a 5 p.m. EST deadline Friday for submitting bids to acquire AT&T Wireless, a re-bid by Cingular Wireless appeared certain, while the industry also was paying close attention to the outcomes of two separate corporate board meetings that took place in different parts of the world earlier in the day.

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Cingular Wireless, which reportedly submitted an offer to acquire AT&T Wireless a few weeks ago, setting a bidding battle in motion, was preparing a new offer late Friday, according to published reports.

Meanwhile, as a result of the first corporate meeting being followed, NTT DoCoMo, which currently owns roughly 17% of AT&T Wireless, decided not to submit a bid for complete ownership of the company, according to published reports and a source that claimed to be familiar with NTT DoCoMo’s intentions.

Meanwhile, Vodafone, whose board of directors met early Friday in the U.K., apparently has decided to submit a bid to acquire AT&T Wireless. According to published reports, its bid is worth about $34 billion or $35 billion. Separately, a source told Telephony that Vodafone had considered making a higher bid, closer to $38 billion or $40 billion, but eventually decided to go lower, keeping in mind that the acquisition could entail high follow-up costs related to infrastructure and branding.

In a research note, Guy Zibi, director of EMEA analysis at Pyramid Research, echoed a portion of that comment, stating, "Only about 15% to 20% of AT&T’s customers use the company’s GSM network…Vodafone would need to expand the footprint of the GSM/GPRS/EDGE network in the extensive U.S. market, and migrate more customers to GSM even as it struggles to expand AT&T Wireless’ subscriber base."

AT&T Wireless, which had set 5 p.m. as the bidding deadline, was not speaking publicly about from whom it had received offers. Nextel Communications and Deutsche Telekom, owner of T-Mobile USA, had been rumored early on to be interested in submitting their own bids to acquire AT&T Wireless, but several sources said they were not aware of any moves being made by either company.