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AT&T, BellSouth in pact
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October 23, 1998: 12:03 p.m. ET
AT&T puts $1B into new venture; two firms to split control of cellular
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NEW YORK (CNNfn) - AT&T Corp. and BellSouth Corp. have reorganized their partnerships in jointly owned cellular phone ventures serving Los Angeles and Houston, the two companies said Friday.
The agreement calls for AT&T to contribute just over $1 billion to a newly formed entity that will hold their existing ownership of Los Angeles Cellular, Houston Cellular and Galveston (Texas) Cellular. AT&T will own about 55 percent with BellSouth holding the remaining 45 percent.
As part of the agreement, a new management structure will be implemented. Subject to oversight by the jointly controlled company, AT&T (T) will manage Los Angeles Cellular while BellSouth (BLS) will manage systems in Houston and Galveston.
The realignment represents another step for AT&T's strategy of establishing a national wireless brand. The pact will allow the long-distance carrier to push marketing of its Digital One Rate plan, which offers rates of 11 to 15 cents per minute, into Los Angeles' 15 million potential subscribers.
Talks have been going on for at least a year about some sort of realignment of the partnerships, but negotiations intensified over the last two weeks, the Wall Street Journal reported earlier Friday.
The new agreements are subject to regulatory review. 
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AT&T
BellSouth
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