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With deal, more services ahead for Mississippi wireless customers

Era ended for Mounger when TeleCorp acquired Feb. 15

RIDGELAND — After Redmond, Wash.-based AT&T Wireless (NYSE: AWE), the third-largest mobile phone company in the U.S., announced it had completed the acquisition of Arlington, Va.-based TeleCorp PCS Inc. (NASDAQ: TLCP) on Feb. 15 in an all-stock transaction, not much changed in Mississippi.

Except that TeleCorp chairman Billy Mounger II was out of a job.

“They asked me to be on the board,” said Mounger. “I told them I’d consider it but I don’t think that’s something in the works. I’ll retire from this.”

AT&T Wireless’ intent to purchase TeleCorp was announced Oct. 8, and the acquisition was expected to close in the first half of 2002.

“Merging with AT&T definitely came much quicker than I expected,” Mounger said. “I figured we’d be running Tritel for a long time, five years minimum. But I always thought it was a possibility for AT&T to buy us.”

TeleCorp, which employed more than 2,800 people, was AT&T Wireless’ largest affiliate, with licenses covering approximately 37 million people in 16 mid-eastern states, from the Great Lakes to the Gulf of Mexico. TeleCorp provided its SunCom digital wireless services in 16 of the top 100 markets in the U.S. In early January, TeleCorp surpassed the one million-subscriber mark with 101,941 new subscribers for fourth quarter 2001, a 9% increase over the previous quarter.

Under its franchise-like affiliate agreement with AT&T Wireless, TeleCorp was the exclusive provider of mobile service in its markets. AT&T Wireless has similar affiliate agreements with other mobile service providers, such as Edge Wireless, a wireless company that services the Pacific Northwest. TeleCorp co-branded its offering under the SunCom and AT&T names. The deal also included joint roaming agreements. Excluding partnerships and affiliates, AT&T Wireless has about 16.4 million subscribers.

“Over 94% of the votes cast were in favor of the merger. We’re pleased that our shareholders recognize the value created through this merger,” said TeleCorp CEO Gerald T. Vento.

Ironically, Mounger voted against the deal.

“I would have liked a little better exchange rate,” he said. “But AT&T Wireless has other affiliates they aren’t making any efforts to buy. In many cases, it’s cheaper for AT&T Wireless to let others build it and run it.”

AT&T Wireless Chairman and CEO John D. Zeglis called the deal “strategically…the single most important move we could make to enhance long-term shareowner value.”

The new markets via TeleCorp will be part of AT&T Wireless’ integrated build out of a world-standard next generation network.

Richard Schultz, director of sales and marketing in Central Mississippi for SunCom/AT&T Wireless, said he’s “excited about being fully a part of AT&T Wireless and all that brings from a nationwide standpoint.”

“In Mississippi, we’re doing a lot in the Madison County/Canton area to provide network for the Nissan plant and all the suppliers in that area,” Schultz said. “We’ll continue to expand coverage into Philadelphia and Yazoo City. With the new casino at Philadelphia and the increase in traffic, we’ll have great service for them. We’re going to be opening new stores in central Mississippi in the next couple of months. We don’t have all the locations locked down yet, but the Madison/Canton area looks attractive.”

SunCom recently completed three new cell sites in close proximity to the Nissan plant being built south of Canton.

“Anticipating and responding to our customers’ needs are at the top of our priority list,” said Scott Mann, vice president and general manager for the corporation’s Mississippi/Gulf Coast Region. “We’ve already made a sizeable investment in our capabilities in the area of the Nissan automobile plant, and we’ll continue to respond as needs arise.”

One of the new cell sites is located on the south side of the Nissan plant site to reinforce signal strengths in and around the facility. The second cell site is located at the intersection of I-55 and Highway 22 in Canton. A third site was added in Livingston to accommodate people traveling to and from the Nissan plant.

“We have looked at that Nissan situation closely and are taking the appropriate steps to make sure that all of our customers have the same level of service without interruption,” Mann said.

Schultz said, “We’ll be overlaying a new GSM (Global System for Mobile Phones) network over our current one that will allow users to hook up their mobile phones to their computers to do anything their computer can do while traveling. It has a great application for business people. You can take a GSM phone anywhere in the world and it will work. It’s truly the global standard.”

The deal means AT&T Wireless’ licenses now cover about 200 million people, roughly the same as Verizon Wireless, the largest U.S. mobile phone firm, co-owned by Verizon Communications (NYSE: VZ) and Vodafone (NYSE: VOD).

“We’re in very good shape from a network perspective,” Mann said. “We’ve got all our licensed areas covered. At this point, it’s more a matter of where our customers tell us they are using their phones and what the patterns of use are. We adapt our plans from there. AT&T being the third largest wireless provider in the country is going to give us more horsepower to bring the latest and greatest products to the marketplace.”

AT&T Wireless became the largest independently traded wireless carrier in the U.S., following its split from AT&T on July 9, 2001, and operates one of the largest digital wireless networks in North America. Its 2001 revenues exceeded $13.6 billion.

“From a shareholder perspective, we created a lot of value for Mississippi investors,” Mounger said. “For our big shareholders, it provided liquidity for them. They held so much stock they couldn’t really sell it because of volume limitations. I hope we made them a lot of money to recirculate in the Mississippi economy.”

For now, Mounger is mulling his next move.

“I’m starting to look around at different ideas with some people from the Tritel management team,” said Mounger, who founded Jackson-based Tritel Inc., a wireless phone company that merged with Telecorp last year.

“If we can get some meaningful tort reform, we would like to do something else in Mississippi,” he said. “I’ll certainly be involved in some volunteer work with inner-city Jackson, CIT.ms, Mississippi Technology Alliance, St. Dominic’s and other Christian organizations. I’m also looking forward to coaching my kids in sports.”

Contact MBJ contributing writer Lynne Wilbanks Jeter at lwjeter@yahoo.com</a.

About Lynne W. Jeter

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