War of the Wireless

By staking a position in the cellular-phone market, MCI takes its battle against AT&T to new heights

Five years ago, MCI Communications was approached by two eager entrepreneurs with an offer to take a 20% stake in a risky venture. Their plan was to transform a local radio-dispatch system, used primarily by taxicabs and truckers, into a state-of-the-art cellular-telephone network. MCI declined the $40 million opportunity, preferring to concentrate on its core business: long- distance service.

Times change. In a stunning reversal last week, MCI announced a deal to acquire 17% of the same venture, Nextel Communications, for a whopping $1.3 billion. "Things were different then," says MCI chairman Bert Roberts Jr. "MCI faces an entirely new world...

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