MCI Communications Corp. yesterday unveiled plans to enter another area of the increasingly lucrative telecommunications industry--mobile radio-telephone service.
The District-based long-distance company announced an agreement in principle with a California mobile-telephone company, ICS Communications, to form a company that hopes to provide the newest form of mobile-radio technology to residents in the Los Angeles metropolitan area.
MCI spokesman Gary Tobin said technological advances permit the number of customers with telephones in their cars and trucks to soar from a few dozen in the typical major city at present to tens of thousands per city, overcoming the transmission problems that now limit the service. Tobin cited industry estimates that total sales of the devices could reach $2 billion within a few years and $6 billion by the end of the decade.
MCI's agreement with ICS is one of many joint ventures and arrangements now being made throughout the country to take advantage of the new mobile radio technology, called cellular radio, which greatly increases the amount of mobile radio service available. Dozens of firms are competing for the limited authority to provide cellular service, with MCI one of many seeking permission to operate from the Federal Communications Commission.
The company's announcement came the same day Standard & Poor's upgraded its ratings on MCI's debentures from B plus to BB minus.
S&P said the rating improvement was due to MCI's progress in increasing its long-distance calling volume, profits and cash flow and its strengthening of the common equity support. Analysts have predicted--and MCI has not disputed--that revenues for the company would more than double this fiscal year to $500 million.