Alltel is the latest company to be brought up by a larger carrier company, following the recently announced merger between T-Mobile and MetroPCS.
AT&T will purchase all of Alltel’s wireless licenses, network assets and retail stores, in a deal which totals a whopping $780 million. But it’s not just the hard assets that interest AT&T; they’ll also acquire approximately 585,000 subscribers as well. Of course this is all subject to regulatory approval from the FCC and DOJ, which isn’t be as simple as it seems, as T-Mobile found out to their detriment last year when they also planned a merger with AT&T.
Alltel provides network coverage over the more rural states of Georgia, Idaho, Illinois, North Carolina, Ohio and South Carolina, which are markets I’m sure AT&T are eager to pickup additional customers in. However, if the merger goes through, AT&T will have to stump up the cost of converting Alltel’s current CDMA network to become comparable with GSM, HSPA and LTE technologies, in order to work with current AT&T handsets.
This could be a relatively expensive endeavor, but will also take a good deal of time and may lead to temporarily network disruptions when the switchover is made. AT&T claims that this transition will enhance the mobile internet experiences of customers roaming in these areas, which sounds like a good thing for everyone.
It’s unlikely that any regulatory agencies will have any meaningful reason to object to the merger, as Alltel is only a relatively small network provider and won’t leave AT&T with a market monopoly or a position to block out its rivals. However, a reduction in market competition is always a worry for consumers, and many existing Alltel customers might not be too pleased about being shoved onto another network either.
AT&T To Acquire Wireless Spectrum and Assets from Atlantic Tele-Network, Inc., Enhance Wireless Coverage in Rural Areas
DALLAS–(BUSINESS WIRE)–AT&T* today announced that it has signed an agreement with Atlantic Tele-Network, Inc. (ATNI) to acquire the company’s U.S. retail wireless operations, operated under the Alltel brand, for $780 million in cash. Under terms of the agreement, AT&T will acquire wireless properties, including licenses, network assets, retail stores and approximately 585,000 subscribers.
ATNI operates under the Alltel name in the U.S., and its network covers approximately 4.6 million people in primarily rural areas across six states – Georgia, Idaho, Illinois, North Carolina, Ohio and South Carolina. The acquisition includes spectrum in the 700 MHz, 850 MHz and 1900 MHz bands and is largely complementary to AT&T’s existing network. ATNI currently operates a retail CDMA network for its subscribers in these areas. AT&T expects that as it upgrades the network, ATNI customers and existing AT&T customers who roam in these areas will enjoy an enhanced mobile Internet experience.
AT&T expects integration costs for network conversion from CDMA will not result in significant dilution to EPS or impact to cash flow. The transaction is subject to review by the Federal Communications Commission and the Department of Justice and to other customary closing conditions and is expected to close in the second half of 2013.
*AT&T products and services are provided or offered by subsidiaries and affiliates of AT&T Inc. under the AT&T brand and not by AT&T Inc.