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BAM, GTE Merger to Bring Savings Bell Atlantic and GTE announced plans to form a single company in a stock swap valued at $52.38 billion. If the proposed merger goes through, it would create the second largest CDMA network in the country, controlling an estimated 62 million local telephone lines and wireless service for 10.6 million subscribers throughout the Northeast, Upper Midwest and Southwestern United States.

Officials at GTE and Bell Atlantic predicted the move will create a cost savings of nearly $2 billion within the next few years, primarily by reducing redundant wireless and wireline systems, combining advertising and product-development expenses, and reducing transportation costs.

"There are a number of things that are affected just in terms of scale and scope that will allow us to save a lot of money," said Peter Thonis, GTE vice president of external communications. "We also expect revenue synergies to result as well."

Thonis did not comment on any effect the merger will have on the 10.6 million wireless customers or on potential changes to wireless equipment, operations or personnel. He did indicate high expectations for the wireless side of the business, however, as nationwide opportunities become possible. "It certainly makes us a premier player on the wireless side," he said. "We expect it to enable us to reduce costs over time and become more competitive with other national carriers."

Industry analysts said they expect some consolidation of equipment and operations to result from the merger, with the resulting savings translating to lower costs for both carriers and subscribers.

"I expect prices in wireless will continue to come down," said Mark Lowenstein, Yankee Group vice president. "One of the benefits is that the cost structure for the combined company in terms of being able to buy infrastructure and phones and such will come down. From the perspective of the customer, that will translate into lower prices."

Lowenstein did not expect any significant investment would be necessary to integrate the networks, as both are based on the same CDMA technology.

Carriers Rewrite Codes for Y2K As the Year 2000 (Y2K) deadline approaches, businesses that rely on computer processing face the prospect of replacing the dating codes. Failure to do so could have serious repercussions on billing, operations and network interoperability.

Despite lots of hype surrounding the century mark, most wireless carriers and vendors said they are well on their way to addressing potential network problems and are optimistic that the industry should experience little more than an occasional hiccup as the transition takes place.

"Many of our carrier members have had programs under way and have been working within their own departments, so we are reasonably comfortable that there are no problems that can't be handled in the course of normal business," said George Shaginaw, CTIA senior vice president for technology and operations. "The industry has taken some initiative upon itself to address the issue and do the testing. The reports we are getting from the field and from our operations people are that they need to upgrade ... but they are working on the requirements and spending the time and money doing that."

The process of upgrading programs that affect billing and other carrier-related operations remains primarily up to the individual carrier, Shaginaw said. Most carriers said they have been rewriting codes and testing programs for the past year and anticipate the new programs will be tested and in place by year's end.

"From a corporate perspective, I don't see any issues at this point," said Ken Woo, AT&T Wireless Services external communications manager. "We have already identified the potential issues and have a group of people working on it, doing tests to make sure everything works."

Some groups are not as optimistic that carriers will pass muster on Jan. 1, 2000. The Gartner Group found that though larger telcos are well-positioned for the transition, between 15% and 30% of small- to mid-size carriers likely will experience at least one critical failure. Many have yet to address the problem, preferring to wait for a quick fix available at the last minute.

Whether now or later, most options will not come cheap, as carriers must either hire in-house programmers to fix the codes manually or spend thousands or millions for software upgrades. Estimates peg global spending between $60 billion and $100 billion to fix the problem.

Shaginaw said the next part of the Y2K challenge will address system interoperability. CTIA plans to coordinate a series of tests after the first of the year to examine and test connections between different wireless companies, wireless to interexchange carriers and wireless-to-wireline connections.

GM Adds GPS-Related Services General Motors (GM) is the latest automobile manufacturer to incorporate GPS and a wireless communications system directly into automobiles at the factory level, providing a 2-way link between automobiles, customers and a 24-hour support center.

The OnStar service combines a GPS system and a voice-activated, hands-free cellular phone. Features include a tracking system in the event that the vehicle is stolen, transmission of data from the car's on-board computer for remote diagnosis of problems and automatic notification any time the airbag is deployed. OnStar support personnel also can provide directions, towing arrangements, remote unlocking and deactivation of alarm devices or lights, directory assistance, and access to a concierge service for more complicated requests.

"The advantage we provide over just having a phone in the glove box is that we can add location," said Todd Carstensen, OnStar communications manager. "This way we can determine exactly where an airbag is deployed in an accident even if you do not know where you are or are unable to call 911."

More than 30,000 GM owners subscribe to the OnStar service throughout the United States and Canada. It is available to more than one million cars and 24 GM models with more models planned for the future. Subscribers must purchase service contracts with both GM and a separate cellular carrier for activation.

Ford-Lincoln-Mercury also offers factory-installed wireless devices in selected models and has developed a Rescue program for its Lincoln Continental that combines a GPS system and wireless device to automatically notify an emergency-response center in the event of an accident.

Sprint Adds Affiliates, Eyes National Network Sprint PCS announced affiliate agreements with Airgate Wireless, Alamosa PCS and Enterprise Communications that expand its digital presence throughout 11 states. Officials said the move fills coverage gaps in small- to mid-size cities and rural areas, and services major highways and connecting roads between current and future markets.

Sprint's Chief Business Development Officer Bernie Bianchino said the local presence should increase rural market penetration and add to its national footprint. "The best way to do that is through an affiliation program with people who will be marketing and selling and delivering a service which is the same as the service we operate ourselves."

Industry analysts said the move was a cost-effective way to develop a national network -- less expensive than acquiring companies or purchasing licenses to build their own network.

"I think the regional companies are going to have a hard time competing with the Sprint PCS Home Rate USA or the AT&T One-Rate Plan," said Glenn James, Deloitte and Touche partner in the telecom and media practice. "What Sprint has done via this affiliate relationship is move themselves much closer down the road toward creating a truly national footprint, one that looks seamless and complete to a subscriber."

Applications Opens IP to Rural Markets Cisco's recent acquisition of Summa Four's programmable switch technology and application developers soon may allow carriers to offer value-added telephony applications more easily and affordably in rural areas or on a national or regional level via the voice-over-IP (Internet protocol) infrastructure.

Officials at Cisco said the acquisition and anticipated products will allow wireless carriers to connect wireless towers with IP lines and support enhanced services such as voice mail, credit-card billing and unified messaging. Because the IP solution costs much less to incorporate than other alternatives, such services can expand to areas traditionally considered out-of-reach due to low subscriber totals.

"It is one thing for a carrier operating in a city to drop a million-dollar voice node in the city," said Junaid Islam, Cisco group manager for architecture marketing. "But to do that in a rural area or build a link all the way back to the city from the countryside isn't easy or cheap, and with only a hundred users, they will never cover their cost."

Islam said that carriers can implement the new solutions directly into their existing software, solving many of the technical headaches that often coincide with voice or data over IP.

The $116 million acquisition of Summa Four is the latest in a string of additions by Cisco in 1998 as the company expands into the networking market. The company has acquired 26 software and network-related companies since 1993, including Class Data, Precept Software, NetSpeed and WheelGroup earlier this year.

Dobson Continues Rural Expansion Dobson recently announced several acquisitions that continue its expansion into rural cellular markets. The company acquired Sygnet Wireless for $337.5 million in stock and the assumption of an estimated $310 million in long-term debt obligations, and it concluded the acquisition of the California 7 RSA from Southern Cellular for $21 million.

"These acquisitions are a continual expansion of properties that we think have significant value and have significant growth potential in the future," said Bruce Knooihuizen, Dobson CFO. "We look for some of the premier rural cellular properties, and we believe these fit in that construct."

Knooihuizen said the two additions cover a combined service population of more than 2.5 million people in Arizona, California, New York, Ohio and Pennsylvania and connect existing service footprints throughout each region. The company also plans to upgrade the existing switching equipment and add more towers to the area affected by the California 7 RSA purchase as well as introduce two retail stores.

Carriers, Locals Compromise on Towers An FCC-brokered compromise soon may settle the decade-old dispute between wireless carriers and local governments and community organizations concerning the placement of cellular towers.

Representatives from both sides agreed to establish an FCC-appointed panel to arbitrate disputes and recommend a compromise. Because the agreement is non-binding, those still dissatisfied with the decision can bring the matter before the courts. The group also addressed new guidelines regarding moratoria, a tactic employed by communities to stall the construction of towers and a source of disconcert to carriers.

"During the course of the moratoria, communities should do whatever they must do to get the rules and regulations in place so they can facilitate the siting of antennas," said Brian Fontes, CTIA senior vice president of policy and administration. "But some communities have implemented moratoria and have done nothing -- they basically use it as a block."

Under the guidelines in the agreement with the FCC, both sides should make several concessions: Local governments will scale back the moratoria on new towers to a fixed period of time -- usually 180 days. In exchange, the industry will withdraw a petition at the FCC asking for nationwide pre-emption of local zoning bans on new towers.

Although not legally binding, CTIA officials said the agreement shows some progress between the two parties, which have been at odds since the early 1990s.

"This provides another option, and if someone avails themselves to that option, it is progress," Fontes said. "It also represents progress if it brings together representatives from local government and various other associations to help formulate guidelines."

In Other News ... * Bell Atlantic Mobile and Transaction Network Services plan to offer a seamless end-to-end wireless solution for credit-card processors. The service will benefit merchants and vendors such as taxi drivers, plumbers, electricians, home-delivery companies and special-event retailers without access to telephone lines.

* SpectraLink announced an agreement with Lowes Companies to install wireless systems in more than 500 home improvement warehouses over the next year.

* Nokia has broken ground on a 155,000-square-foot facility in Irving, TX. The site should be completed in the summer of 1999 and will handle administrative, sales and marketing staff for North America.* Rural Cellular rece ived regulatory approval to acquire Western Maine Cellular for approximately $7.5 million. The move gives Rural Cellular 3.1 million total POPS and 196,000 customers, up from 1.9 million POPS and 111,000 customers at year-end 1997.

* Cellular One launched its digital PCS service in Rhode Island and Bristol County, MA. Service plans include up to 1,500 minutes of free long-distance calling throughout North America.

* RTS Wireless and the Traffic Station Group will provide real-time, personalized traffic updates to subscribers via their PCS phones, cellular phones, pagers or other wireless communication devices.

* Metrocall and Vanguard Cellular Systems signed a multiyear agreement in which Vanguard will purchase, install and maintain transmitters on Metrocall's paging network in exchange for discounted airtime rates for national paging service. The two also are considering a similar arrangement for the PCS license that Metrocall will obtain through its acquisition of AT&T's Advanced Messaging Division.

* Ericsson began trial testing of adaptive-antenna technology with German operator Mannesmann Mobilfunk. Ericsson hopes to reduce interference and improve transmission performance.

* TSR Wireless announced an agreement with KOCO-TV Channel 5 to provide customers in the Oklahoma area with tornado warnings and other dangerous weather alerts via their alphanumeric pagers.

* CenturyTel will donate up to 1,000 cellular phones to domestic-violence shelters across Michigan through the Wireless Alliance for Safe Families program. Units will have preprogrammed emergency numbers and voice-mail features for victims seeking housing or employment.

* Pagemart announced a $20 million agreement with Motorola for transmission equipment to be deployed in its nationwide data paging network. Motorola also will upgrade 1,200 existing transmitters to be compatible with network controllers.

* Tellabs completed its intended merger with Coherent Communications Systems. Officials plan to maintain both product lines to meet customer needs until launching new products within the next year.

The U.S. paging industry finally may experience a turnaround in 1999, according to a report by The Strategis Group. Analysts predict an increase in average monthly revenues per customer and improved operating margins as carriers focus less on subscriber growth and more on financial performance. Strategis Group officials said the development should benefit paging companies, few of which experienced significant profits in recent years.

"Only a handful of paging companies are even profitable," said Cynthia Hswe, a Strategis Group consultant. "Most have very high capital expenditures as they expand their national networks, and pricing remains very competitive. The only way most providers have been able to compete is to offer bottom-of-the-barrel pricing."

In 1997 the average revenue for paging customers declined slightly to $9.58 per month, a 2% decrease compared to 1996 figures. However, that total is expected to increase at least 5% during 1998 as paging subscribers sign up for high-revenue services such as alphanumeric paging, voice mail and information services.

Oct. 6-8 The 1998 Carrier IP TelephonyComForum; presented by the International Engineering Consortium; Chicago. For information, call 312-559-4600.

Oct. 6-9 Handset Technology; presented by IBC Group; Santa Clara, CA. For information, call 508-481-6400. Oct. 8-9

Telecommunications Services Industry Conference; presented by Frost & Sullivan; Boston. For information, call 212-964-7000.

Oct. 12-14 Traffic Engineering for Telecommunications; presented by the University of Wisconsin-Madison; Madison, WI. For information, call 800-462-0876.

Oct. 12-14 Wireless I.T. Expo and Convention; co-sponsored by The Wireless Data Forum and Seybold's Wireless University; Las Vegas. For information, call 202-736-2980.