March 20, 1997 8:51 AM ET

AT&T stops deployment of PACT
By Charles Cooper

  After racking up millions of dollars in losses in its paging business, AT&T has decided to halt the deployment of its PACT narrowband PCS network.

The decision came only two weeks after AT&T Wireless Services Inc. president, Jordan Roderick, gave a formal presentation to industry executives discussing the division' plans for promoting PACT. AT&T closed the operation on Monday but did not publicize the news.

PACT, an acronym for Personal Air Communications Technology, was a technology co-developed by AT&T with Pacific Communications Sciences and Ericsson to compete against Motorola Inc.'s Reflex messaging protocol.

Sources say AT&T decided to pull back on PACT because of its multi-billion dollar plans to expand into the local telephone business in 1997 as well as build up its broadband PCS net-work infrastructure. With so much on its plate, AT&T decided it could not any longer afford to carry a continuing money loser any longer, according to the sources.

AT&T Wireless will retain the NPCS licenses, at least for the time being, until it figures out what to do next. AT&T executives are reportedly considering a plan to make the PACT specification public in the near future.

"The Achilles heel of their concept was to try to pay for network right out of the gate," said one source. "AT&T probably looked at what they had to spend on their phone networks and said the hell with it."

Ken Woo, a spokesman for AT&T Wireless., said the PACT project fell victim to changing priorities at AT&T.

Woo said. "It was one of those things that was out there and had a lot of promise. But it had nothing to do with any lack of faith in the technology. It' a purely economic decision."

Woo said 106 positions will be eliminated. He added AT&T will attempt to integrate the affected employees elsewhere inside the company.

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