MCI Communications Corp. yesterday said it had reached an agreement in principle to sell all of its cellular radio and paging operations nationwide to McCaw Communications Inc., a Bellevue, Wash., company.
MCI said it agreed to sell the properties to McCaw, a privately owned communications company that operates cellular, paging and cable systems throughout the country, for $120 million.
Through its subsidiary, MCI AirSignal, MCI holds interests in 12 cellular systems. Cellular phone systems use computer-controlled networks of radio transmitters to route telephone calls to mobile phones. MCI AirSignal also provides paging services in 50 cities, including Washington and Baltimore.
The operations "don't fit into our overall strategy" of providing long-distance services, said John Houser, an MCI spokesman. Houser said MCI was also selling the properties because lotteries at the Federal Communications Commission to award licenses for the systems do not guarantee MCI a license in the markets it wants. "There is no guarantee we'll get any additional cities," said Houser.
He added that, of the two licenses the FCC awards in each city, one has automatically gone to the local phone company and those companies now have "a good step up" in building and operating their systems over those of competitors, he said.
MCI wants out of the paging business because "it's cutthroat and difficult to make a profit," Houser said. As many as 50 different companies might sell paging services in a given market, he said.
McCaw is expected to incorporate about 120 employes in the Washington area and 500 in the MCI AirSignal division nationwide into its overall operations, said Houser.
The sale is subject to approval by the boards of directors of both companies, the Federal Communications Commission and other agencies. The sale also is subject to the resolution of a lawsuit between MCI and Mobile Communications Corp. of America, which is based in Jackson, Miss.
Last month, it was announced that MCI had signed a letter ofintent to sell the properties toanother company -- Mobile Communications Corp. of America -- for $121.5 million. But, the agreement was voided later the same day after MCI discovered BellSouth, a regional Bell telephone company based in Atlanta, was also involved in the deal.
MCI said it declined on principle to sell any of those properties to a phone company because of what MCI perceives is a lack of attention to efficient provision of interconnections to long-distance companies by regional phone companies.