In a press release, the company said that it had explored the possibility of a deal with the San Francisco-based wireless firm, but had "determined not to pursue a bid for the company at this time."
Bell Atlantic, which wants to combine AirTouch's U.S. wireless assets with its own to form a national mobile network, reportedly has offered close to $45 billion for the company. The Vodafone Group, Britain's biggest wireless operator, responded earlier this week with a bid close to $55 billion.
MCI WorldCom never made its own bid, but several media reports had said it was also interested in the wireless giant. The No. 2 U.S. long distance company has developed substantial end-to-end local, long distance, and international networks following several years of mergers and investments, but has yet to enter the wireless market.
But some analysts said AirTouch, whose coverage area does not yet include the full United States, would not be the ideal wireless partner for MCI WorldCom. Investors agreed, sending the stock tumbling several points yesterday, after news of the company's interest broke.
Nevertheless, MCI WorldCom should continue looking at wireless options in order to keep up with the other major world telecommunications companies, analysts said.
"We would recommend that MCI go with something like Nextel," said Roger Wery, a telecommunications analyst with Renaissance Worldwide. "It would be important to have a national footprint, because it would be their first move into wireless."
Nextel is a smaller mobile phone company with a national U.S. footprint, but with a market capitalization of only about $8 billion.
While MCI WorldCom's withdrawal from the bidding war leaves Bell Atlantic and Vodafone alone in the race for AirTouch, some analysts said other companies like British Telecom or BellSouth, both of which would like to gain a large U.S. wireless presence, still could signal their interest.