ATT Palm Wireless Access by Spring

Dow Jones Newswires -- December 7, 1999
Ma Bell Gets Wired About Wireless
NEW YORK (Dow Jones)--AT&T'S (NYSE:T) CEO has finally made it official. After weeks of speculation, Michael Armstrong confirmed to analysts on Monday that Ma Bell will soon create a tracking stock for the company's fast-growing wireless business.

He named President John Zeglis the honcho of the wireless stock, which will include both the enormous mobile phone business and a new push in local 'fixed wireless' service to homes and businesses. And Zeglis, an AT&T veteran whose visibility had dimmed during AT&T's foray into cable, began his presentation in most exuberant fashion, with not one, but three claims to being 'pumped.' And why not? As rivals like the Baby Bells and MCI WorldCom (WCOM) mount ever-greater challenges to AT&T, Ma Bell is finally letting investor euphoria about the wireless future finance her effort to win new customers and revenue sources. The company will sell up to a 19% stake in its wireless operations to the public, Zeglis said. Analysts figure the offering would be the largest IPO ever, netting the company something between $8 billion and $10 billion.

That's a hefty war chest all by itself. And the new stock will also provide AT&T with, as Armstrong put it, a currency to bankroll a multibillion-dollar expansion into fixed-wireless local service. Armstrong said the company would roll out a 'national local exchange competitor' using fixed-wireless technology to offer local and high-speed Internet service in three metropolitan areas next year. In each of these areas, AT&T expects to set up local connections that can include high-speed Internet access and local service, with flashy features like 'personal Web pages' users can craft into portal sites and a cell phone that becomes a home phone inside the house. By bundling its whiz-bang offerings and promising unified billing, AT&T would love for these services to buoy sales of its increasingly beleaguered long distance services. This strategy keeps the company in step with MCI WorldCom, which is buying Sprint (FON) in part to finance a national fixed-wireless strategy, and with the Baby Bells' high-speed Net offerings.

At the same time, the tracking stock will help AT&T to go after Sprint PCS (PCS) in the wireless Web area. Zeglis promised to 'make wireless data as popular and common as wireless voice has become' by attracting software developers to create enticing applications and by offering flat-rate pricing on AT&T's all-digital network. Services like these could create new revenue sources for AT&T, Vice President Kendra VanderMeulen said; a feature on future wireless phones will let AT&T subscribers comparison-shop for goods, either ordering from an online store or downloading directions and coupons from a nearby physical store. In either event, she explained, the advertiser would pay AT&T a commission. The company expects to have these services, along with the now-customary email and news, on PalmPilots by springtime and on new phones from Mitsubishi and Ericsson (ERICY) by the end of next year.

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AT&T Wireless

MyPilot.Com @ 12/7/1999 2:30:54 PM #
There has been connectivity for AT&T and Palm for about 2 years now,
via the Mitsubishi Mobile Access.

This phone has sold in the hundreds of units.

AT&T is going nowhere with wireless data unitl they use
their considerable voice network to provide data services.



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