OmniSky, News Corp. Join to Expand Wireless Services

OmniSky Corp. and News Corp. allied Tuesday to jointly explore international opportunities for wireless Internet services. The alliance will extend OmniSky’s services globally by combining its service with News Corp.’s content, media and technology expertise.

Patrick McVeigh, chairman and chief executive officer of OmniSky, said the partnership with News Corp. (NWS) gives OmniSky the media expertise and international presence to accelerate the rollout of its services.

He added that several industry sources have estimated that there will be more than 1 billion cellular communications devices — 40 percent of them data enabled — globally by 2003.

Lachlan Murdoch, News Corp. senior executive vice president, said the partnership fits snugly with News Corp.’s goal of developing wireless Internet content internationally.

“The new platform will provide another distribution method for News Corporation’s existing array of content, already reaching hundreds of millions of consumers daily through our worldwide stable of newspapers, magazines, books and television,” Murdoch said.

While the terms of the deal were not released, OmniSky said Tuesday that News Corp. would provide it with an additional $60 million in financing. As part of the transaction, News Corp. will appoint one representative to OmniSky’s board. OmniSky also said that PSINet Inc. (PSIX) will provide it with $15 million in financing. After the transactions close, News Corp. will hold about a 10 percent stake in OmniSky while PSINet will hold about a 2.5 percent stake.

The closing of the News Corp. financing and joint venture transactions is subject to the receipt of regulatory approvals.

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