CINGULAR CERTAINTY IN AWE BIDS

As the wireless industry eyes a Feb. 13 deadline for suitors to submit their bids to acquire AT&T Wireless, hushed activity in recent days suggests Cingular Wireless retains an edge over other potential bidders, but NTT DoCoMo and Vodafone remain in the hunt.

AT&T Wireless set the Feb. 13 bidding deadline after Chairman and CEO John Zeglis acknowledged interest from multiple carriers wanting to make a deal. Within the last several days Cingular resubmitted its original acquisition offer of about $27 billion, as was required by the formal bidding process set up by AT&T Wireless and its financial advisors.

“Cingular is the most likely to buy,” said Ken Hyers, senior analyst at In-Stat/MDR, in a research update. “Cingular will successfully bid for AWE [AT&T Wireless' stock symbol], and at the end of the day, the AT&T name will disappear from wireless.”

Hyers acknowledged that NTT DoCoMo, as a 17% equity holder in AT&T Wireless, is “best positioned” to acquire the company, but also has been backing off from international expansion after past efforts yielded poor performance.

Meanwhile, Vodafone can gain 100% ownership of a U.S. carrier by selling its 45% stake in Verizon Wireless back to Verizon Communications, and acquiring AT&T Wireless. However, Hyers said Vodafone might have too much to lose by selling its stake in Verizon Wireless, which is by several measures the financially strongest U.S. carrier.

Still, published reports and sources close to NTT DoCoMo and Vodafone said each carrier was still interested in bidding on AT&T Wireless.

The British tabloid The Observer reported that Vodafone was ready to make a formal bid, though a source told Telephony that Vodafone management still hadn't decided what to do.

“It could be down to three bidders with plausible interest,” one source said. “NTT's declined its right to be informed of other bids, so it will probably submit its own. [Vodafone CEO Arun Sarin] is holding the wild card right now.”

Late last week, several analysts watching the AT&T Wireless bidding unfold suggested that Vodafone is bluffing about using that wild card.

“This mulling by Vodafone could be just a pose to force Verizon Wireless' direct competitor [Cingular] to ultimately pay more than it hoped,” said one analyst.

Other published reports also stated that Vodafone was more intent on submitting a bid to acquire Russian carrier MTS, and likely would not bid on AT&T if that effort moved forward.