AT&T recently agreed to lay out $2.35 billion in cash for the lion’s share of the Alltel Wireless assets being divested by Verizon Communications in order to comply with regulatory approval of its purchase of Alltel.AT&T will therefore acquire network assets, wireless spectrum licenses, and one and a half million subscribers across nearly 80 service areas.
The Verizon-Alltel deal is estimated to be worth $28.1 billion and will make Verizon Wireless the single biggest U.S. wireless operator, moving past AT&T in its total number of subscribers.
The states that are affected by this deal are: Alabama, Arizona, California, Colorado, Iowa, Kansas, Michigan, Minnesota, Montana, Nebraska, Nevada, New Mexico, North Dakota, South Dakota, Tennessee, Utah, Virginia, and Wyoming. These states’ affected wireless subscribers are mostly in rural locations.
These area subscribers will now gain access to AT&T’s 3G broadband network, which is the fastest 3G network in the United States. It is currently available in almost 350 major metropolitan areas and AT&T is constantly pushing for expansion of its market. Additionally, AT&T provides Wi-Fi access to almost 20,000 United States “hotspots” such as Barnes & Nobles and Starbucks. The company also provides this service to over 80,000 commercial sites across the nation and the globe.
AT&T’s wireless customers who have 3G LaptopConnect cards as well as qualified smartphone contracts have free unlimited Wi-Fi access at the AT&T serviced U.S. hotspots. The smartphone access of the new subscribers will be greatly expanded.
According to Ralph de la Vega, president and CEO of AT&T Mobility and Consumer Markets division, “Wireless continues to be AT&T’s greatest growth driver, and this transaction will complement our existing network coverage, particularly in rural areas. The acquisition will add network assets, distribution channels, and 850 MHz spectrum in a significant portion of the U.S., enabling even better coverage for AT&T’s subscribers in those areas. The subscribers who join the AT&T family will realize significant benefits, including access to AT&T’s 3G broadband network — the nation’s fastest — and to an industry-leading lineup of iconic devices — from the latest smartphones for business users to quick messaging phones for texting teens.”
AT&T will be selling what used to be called its Centennial Wireless properties to Verizon in the deal. Valued at $240 million, this part of the deal will give Verizon network assets, licenses, and almost 120,000 current customers across five service areas of Mississippi and Louisiana.
The finalizing of the deal is expected to take place in the final quarter of 2009. There are no delaying regulatory issues foreseen.
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