Bell Atlantic will own 55 per cent of the new company, which will serve 20 million customers, and Britain's Vodafone, the world's biggest cellphone operator, will own the rest.

The network that Vodafone inherited in its $62 billion takeover in January of San Francisco's Airtouch covers most of the western states, while Bell's covers most of the east.

The tie-up is the fast track both of them sought towards aready-made coast-to-coast network, better able to compete with existing pan-US Wireless companies such as AT&T, Sprint PCS Group and Nextel Communications Inc.

"This is a logical fit, naturally uniting our US Properties and strong management teams and enhancing the benefits of Bell Atlantic's merger with GTE," Bell Chairman and Chief Executive Ivan Seidenberg said.

The deal isexpected to take six to 12 months to complete.

Vodafone shares gave a muted initial response, gaining 2 per cent or 26 pence To 13.29 pounds shortly after the statement.

"Much has already been discounted," said SG Securities telecoms analyst Sean Johnstone in London.