WorldCom, Cingular Reach Deal on Wireless Customers

[bobolito]

NEW YORK (Reuters) - WorldCom Inc. WCOEQ.PK and Cingular Wireless on Wednesday reached a tentative agreement to settle their dispute involving the fate of 300,000 WorldCom wireless customers.

Representative from of both companies declined to disclose the terms of the agreement until certain parties with an interest in the bankruptcy proceedings of the No. 2 U.S. provider of long-distance phone service were given time to review the settlement.

U.S. Bankruptcy Court Judge Arthur Gonzalez gave all interested parties, including the bondholders, vendors and other creditors until noon Friday to file objections to the plan. Gonzalez said he would hear objections Aug. 6.

Attorneys for Cingular, the nations No. 2 wireless telephone company, WorldCom and the creditors committee, asked the judge for the unusually short deadline to settle the matter and stem the flow of customers bolting the wireless service at a rate approaching 100,000 a month.

The lawyers agreed that a lengthy process would amount to wasting an asset valuable to a company struggling to keep afloat.

On July 23 Cingular asked the court for permission to transfer the customers. WorldCom, which last month said it planned to exit the wireless business, had been selling wireless service under its own brand, using other companies' networks, including Atlanta-based Cingular's.

WorldCom attorney Alfredo Perez said Cingular offered to pay WorldCom $30 for each transferred customers. Agreements with AT&T Wireless Services, Sprint and Alltel Corp. call for amounts "substantially in excess of that," Perez told the judge.

Cingular, the No. 2 national wireless telephone company, is a joint venture of BellSouth Corp. BLS.N and SBC Communications Inc. SBC.N . In court documents, WorldCom accused Cingular of illegally soliciting WorldCom wireless customers and threatening to terminate service.

Cingular had argued initially that it terminated the reseller agreement with WorldCom before it filed for bankruptcy, the largest in U.S. history, last month. WorldCom argued in its opposition that termination was not proper, under the terms of the reseller agreement.

Typically when a company declares bankruptcy, all assets are frozen and companies must request special permission from the court to release any of the assets.

http://www.reuters.com/news_article....toryID=1277816

[Airb330]

WHat happens if they do not switch them over to cingular? For DE, ATT TDMA is not an option. WOuld they let people out of their contracts then? That'd be great since my step-dads mom got suckered into a cell phone by worldcomm. She uses it, but would rather get something cheaper or not have one at all.