AT&T Completes Acquisition of Dobson Communications to Enhance Wireless Coverage

[blsemp]

Transition to Begin by Dec. 9; Customer Benefits to Include Improved Network Coverage and Access to Innovative Products and Services

San Antonio, Texas, November 15, 2007

AT&T Inc. (NYSE:T) today announced that it has completed its acquisition of Dobson Communications Corporation (NasdaqCEL), a provider of rural and suburban wireless communications services under the Cellular One brand. The combination of the two companies' wireless networks will allow AT&T to deliver broader wireless coverage to customers, including to nearly 1.7 million Dobson subscribers.1

"We remain committed to providing our wireless customers the best and broadest network to help them stay connected whenever, wherever and however they want," said Randall L. Stephenson, AT&T chairman and CEO. "This transaction will produce substantial benefits for customers of both AT&T and Dobson. AT&T's customers will enjoy deeper coverage in rural and suburban areas. Dobson's customers will have access to AT&T's full portfolio of innovative products and services."

"This transaction also creates value for AT&T stockholders," said Stephenson. "We expect to realize significant synergies and believe Dobson's customer base will provide considerable opportunities for continued growth."

The two companies have a long-standing relationship as roaming partners, and AT&T expects a smooth transition. AT&T will immediately begin to implement a carefully planned process to integrate the Dobson and AT&T wireless networks, combine product portfolios and merge customer care initiatives.

Enhanced Network Coverage and Service
The merger extends AT&T's coverage and services into a number of primarily rural and suburban areas in Alaska, Arizona, Illinois, Kansas, Kentucky, Maryland, Michigan, Minnesota, Missouri, New York, Ohio, Oklahoma, Pennsylvania, Texas, Virginia, West Virginia and Wisconsin.

Dobson customers will experience a number of benefits as a result of joining AT&T, including access to the nation's largest digital voice and data network, offering maximum convenience and flexibility wherever subscribers are. Dobson customers in AT&T's traditional 22-state wireline footprint, including subscribers in Illinois, Kansas, Kentucky, Michigan, Missouri, Ohio, Oklahoma, Texas and Wisconsin, will have the opportunity to join the nation's largest unlimited calling community — through AT&T UnitySM plans — with unlimited calling to more than 120 million AT&T home, business and wireless customers. Dobson customers traveling abroad will also have the advantage of access to lower-cost service in more than 190 countries.

With the addition of Dobson, AT&T's fully integrated GSM network now covers more than 290 million people in 13,000 U.S. cities and towns. The addition of Dobson's 850 MHz spectrum will also provide the opportunity for further expansion of third-generation (3G) GSM technology throughout the United States.

Brand Transition
AT&T will move quickly to rebrand Dobson as AT&T and to make AT&T's innovative products and services available to Dobson customers. By Dec. 9, virtually the full portfolio of AT&T products and services will be available at more than 200 Dobson retail locations2. By that same date, temporary signage will be installed in all Dobson locations. AT&T expects to complete the rebranding process, with permanent signage in all retail locations, by the end of second quarter 2008.

AT&T will honor the current rate plans of Dobson customers. However, Dobson customers will have the opportunity to migrate to AT&T rates plans without activation or upgrade fees. Dobson customers who choose AT&T calling plans will also benefit from Rollover ® Minutes, a feature exclusive to AT&T. Dobson Mobile-to-Mobile customers will also be able to reach AT&T's 65.7 million wireless customers. AT&T customer contracts will not change.

Merger Synergies and Financials
AT&T expects to realize significant synergies as a result of the transaction. The net present value of these potential synergies is approximately $2.5 billion and includes enhanced control over the customer experience through the reduction of roaming and savings in overhead and operations.

As previously reported, AT&T expects Year 1 dilution to earnings per share (EPS) from this transaction to be minimal — between $0.03 and $0.04 on a reported basis — and that the transaction will have a positive and growing impact on EPS and free cash flow starting in the second year after the acquisition closes. AT&T's financial outlook remains unchanged, with expected double-digit adjusted EPS growth in both 2007 and 2008. AT&T continues to expect strong growth in free cash flow after dividends — $6 billion to $7 billion in 2007.

As previously announced, under terms of the agreement, Dobson stockholders will receive $13.00 per share. In the coming days, AT&T's transfer agent will contact Dobson shareholders to provide instructions for completing the cash-for-stock exchange.

Approval Process
The completion of the Dobson acquisition comes after an extensive review process, which included approval by or filings with two states, the U.S. Department of Justice (DOJ) and the Federal Communications Commission (FCC).

As a result of the review process, AT&T will divest Dobson operations in four primarily rural areas — one in western Oklahoma, one in Texas and two in Kentucky. In addition, AT&T will divest the Cellular One name to a buyer that will continue to make it available for use by wireless carriers and will exit from its minority interests in Mid-Tex Cellular Ltd. and Northwest Missouri Cellular Limited Partnership. AT&T currently owns 1 percent or less in each of these entities.

AT&T will also voluntarily commit to an interim cap on federal eligible telecommunications carrier (ETC) support. This cap will be set at twelve times the level of support that AT&T and Dobson were collectively eligible to receive as competitive ETCs for the month of June 2007. This commitment by AT&T serves the public interest by minimizing pressure on the federal universal service fund caused by rapidly increasing demand for high-cost universal service support.

[walkguru]

Wirelessly posted (Walkguru's: Opera/8.01 (J2ME/MIDP; Opera Mini/3.1.8295/1724; en; U; ssr))

so it just gets better.

[blsemp]

I do hope so.

[Alienware_51]

So does this mean that Cellular One customers can call AT&T customers as mobile to mobile now??? or do you have to switch over to an AT&T plan?

[clock3687]

Originally Posted by blsemp AT&T will honor the current rate plans of Dobson customers. However, Dobson customers will have the opportunity to migrate to AT&T rates plans without activation or upgrade fees. Dobson customers who choose AT&T calling plans will also benefit from Rollover ® Minutes, a feature exclusive to AT&T. Dobson Mobile-to-Mobile customers will also be able to reach AT&T's 65.7 million wireless customers. AT&T customer contracts will not change.

Originally Posted by Alienware_51 So does this mean that Cellular One customers can call At&t customers as mobile to mobile now??? or do you have to switch over to an At&t plan?

Yea, you've got 66 million new buddies that you can call for free. ATT is making dobson transition fairly quickly. Im surprised at how quickly its gone. Verizon is going to have a much tougher time integrating RCC.

[Alienware_51]

Originally Posted by clock3687 Yea, you've got 66 million new buddies that you can call for free. ATT is making dobson transition fairly quickly. Im surprised at how quickly its gone. Verizon is going to have a much tougher time integrating RCC.

Lol, ok, sweet. clock that is a sweet picture! i might have to put that as my background on my phone

[RadioFoneGuy]

Originally Posted by clock3687 Yea, you've got 66 million new buddies that you can call for free. ATT is making dobson transition fairly quickly. Im surprised at how quickly its gone. Verizon is going to have a much tougher time integrating RCC.

Dobson and The old ATT have been pretty close over the years and ATT was Dobsons primary roaming partner. Dobson pretty much followed in ATT footsteps to ensure the stable income.
ATT went TDMA, Dobson went TDMA. ATT went GSM, Dobson went GSM and so on. Dobson already had existing handoff back in forth between the old ATT and Cingular so merging to two will not be to bad.

[coalminer]

But if you are on one of the unlimited statewide plans, why would you want to switch to an AT&T plan? I wonder if they are going to force people on the unlimited plans to switch.

[SmArTeStChIlD421]

Originally Posted by Alienware_51 So does this mean that Cellular One customers can call AT&T customers as mobile to mobile now??? or do you have to switch over to an AT&T plan?

it said that mobile-to-mobile was a benefit of switching to an AT&T plans so no.....current Dobson customers who have not switched will not enjoy M2M to AT&Ts customer base unless they switch...

AT&T will honor the current rate plans of Dobson customers. However, Dobson customers will have the opportunity to migrate to AT&T rates plans without activation or upgrade fees. Dobson customers who choose AT&T calling plans will also benefit from Rollover ® Minutes, a feature exclusive to AT&T. Dobson Mobile-to-Mobile customers will also be able to reach AT&T's 65.7 million wireless customers. AT&T customer contracts will not change.

Originally Posted by coalminer But if you are on one of the unlimited statewide plans, why would you want to switch to an AT&T plan? I wonder if they are going to force people on the unlimited plans to switch.

i dont think they will need to force people to switch.....just the benefits i quoted should be enough....

[budney]

I just signed up with Dobson a couple of days ago (knowing of the buy out) to take advantage of Dobson's $20 100 minute statewide plan and $15 unlimited data. AT&T has nothing close to this plan at this price point for post paid customers. This plan is perfect for me for for backup/emergency/network testing. I could care less about rollover or M2M, so AT&T is going to have to really entice me if they want me to switch to one of their plans.

[SmArTeStChIlD421]

yeah cuz they wont deny legacty Dobson customers the AT&T coverage and network........could they deny Dobson customers the 3G network???

[Katt505]

So, when are they integrating the towers? I'm debating on who to stick with (I have the Iphone, and I LOVE IT)...but I live in the boonies. Dobson was good in rural areas, so...why does my service remain shoddy? Sometimes I have to reboot the phone to get it from no service to 4 bars!!! I can be in the same area with no service, shut off the phone, turn it on, and get bars. It makes no sense. Is my phone bugging, or is it the service.

[SmArTeStChIlD421]

thats a good question.......they never really tell you all the technical details in the press releases........thats always internal

[Jay2TheRescue]

Originally Posted by Katt505 So, when are they integrating the towers? I'm debating on who to stick with (I have the Iphone, and I LOVE IT)...but I live in the boonies. Dobson was good in rural areas, so...why does my service remain shoddy? Sometimes I have to reboot the phone to get it from no service to 4 bars!!! I can be in the same area with no service, shut off the phone, turn it on, and get bars. It makes no sense. Is my phone bugging, or is it the service.

Its in the phone software. I ran into that problem with my phones briefly durring the Orange/Blue integration. The phone will not go to the other network as long as it can detect its home network. It does not matter that the signal is so weak you can't make a call, if the network is detected it will not roam. I had to either manually select my network, or disable 850 to make my phones go onto the Blue network. ATT has a full plate with their 3G rollout, but should get the networks integrated in the next few months.

-Jay

[budney]

If I remember right, AT&T was saying by the end of Q2 next year everything would be integrated.

[RadioFoneGuy]

Originally Posted by Jay2TheRescue Its in the phone software. I ran into that problem with my phones briefly durring the Orange/Blue integration. The phone will not go to the other network as long as it can detect its home network. It does not matter that the signal is so weak you can't make a call, if the network is detected it will not roam. I had to either manually select my network, or disable 850 to make my phones go onto the Blue network. ATT has a full plate with their 3G rollout, but should get the networks integrated in the next few months. -Jay

ATT is going to set their network as the priority on the handset in the overlap areas, so if you have an ATT flashed sim it will prefere the ATT network over Dobsons similiar to the existing roaming set up. This is only suppose to be until next year then there will be network to network handoffs which there were already a few before the aquisiton.

I am in a Blue (ATTWS) market where there is alittle overlap where there are a few towers that have both ATT and Dobson sites. ATT calls the Cingular markets Orange the ATTWS blue and now they are calling Dobson RED.

[Jay2TheRescue]

Originally Posted by RadioFoneGuy ATT is going to set their network as the priority on the handset in the overlap areas, so if you have an ATT flashed sim it will prefere the ATT network over Dobsons similar to the existing roaming set up. This is only suppose to be until next year then there will be network to network handoffs which there were already a few before the acquisition. I am in a Blue (ATTWS) market where there is alittle overlap where there are a few towers that have both ATT and Dobson sites. ATT calls the Cingular markets Orange the ATTWS blue and now they are calling Dobson RED.

So now we're Orange, Blue, and Red? Does Dobson primarily favor 850, 1900, or do they use both equally?

-Jay

[budney]

In my area Dobson is 850 only. It will be interesting if AT&T adds 1900 to the mix in this area as they do have a licence for it.

[cellular_freak]

Yeah, in my area, Dobson is completely 850. AT&T completely surrounds us though with 1900.

I do have a question though. A lot of my family has Dobson and I noticed that when they go into the nearby AT&T area, their phones will no longer take AT&T's towers and have full service. Now they are latching onto CellularOne's towers from WAY far away and have about 1-2 bars and can barely make a call. What's up with that? It's never been this way, EVER. AT&T has always had priority in this area and the phones never picked up the CellularOne towers. Now I'm wondering once the integration is complete if there's going to be problems with all of the CellularOne customer's phones. Maybe due to the SIM? Maybe AT&T should give all the CellularOne customers new AT&T SIM cards. (That's kind of why I, myself, prefer CDMA. You can easily update your roaming capabilities by dialing a number, LOL.)

[momcat1]

Looks like they've already started doing something with tower integration, at least in our area. This is heavily populated Dobson country, and this week I've noticed that some of the towers I pick up frequently are now identified as Cell One with 0 for the tower number. These towers will not process voice or data, and when picking them up you can't poll for another, weaker signal. You'll see 4 bars of this useless signal is all. The ATT towers seem to be processing data faster than they used to as well. And the ATT signs have already gone up on the Cell One stores, even though the website says not until after 12/9. Of course, after this merger at least we'll have company stores in our county. We did not have any before. And Cell One is still running holiday sales promotions on radio and in print, with no mention of ATT. Seems like there is a lot of misinformation being given out, just not sure where it's coming from.

[SmArTeStChIlD421]

well i think we are all in agreement that the easiest way to do something is to start integration as soon as the merger is approved.........dont let it sit around and spoil

[RadioFoneGuy]

Both of the last post sound like a problem with the way the phone is roaming. No network changes have been made on either side except for allowing calling on both networks with no roaming and allow both ATT/Dobson customers to M2M.

Bay City and Saginaw Cell One use to have no tower so Cell ONe customers would roam full signal on ATT. Last year Cell one built 2 towers in the area, with these new towers the phone sees home network regardless of signal and will not release to ATT. This is the case with most phones when it comes to roaming, if the handset sees its home area it will not release unless manually switched or coverage dropps completely. This is not a technolgy based issue either.

Far as the unusable signal, the voice side was working but there was a data problem that was caused by a fiber Optic line being cut (from what I heard)

Most Dobson markets are 850 A band but in Michigan both 850 and 1900 are used.

Nothing is supposed to change until Dec 9th unless that local market got a jump on it.

[SmArTeStChIlD421]

Originally Posted by RadioFoneGuy Both of the last post sound like a problem with the way the phone is roaming. No network changes have been made on either side except for allowing calling on both networks with no roaming and allow both ATT/Dobson customers to M2M. Bay City and Saginaw Cell One use to have no tower so Cell ONe customers would roam full signal on ATT. Last year Cell one built 2 towers in the area, with these new towers the phone sees home network regardless of signal and will not release to ATT. This is the case with most phones when it comes to roaming, if the handset sees its home area it will not release unless manually switched or coverage dropps completely. This is not a technolgy based issue either. Far as the unusable signal, the voice side was working but there was a data problem that was caused by a fiber Optic line being cut (from what I heard) Most Dobson markets are 850 A band but in Michigan both 850 and 1900 are used. Nothing is supposed to change until Dec 9th unless that local market got a jump on it.

um......the M2M was a perk for customers to switch to AT&T.......if Dobson subs wanted to call AT&T customers for free then they had to switch to the AT&T plans

[RadioFoneGuy]

I had to sit in on a sales meeting and they were saying Dobson customers would be able to talk to M2M and landline with out using minutes but have to buy an ATT plan to get roller over and some other stuff.

[cellular_freak]

Yeah, actually I just got off from the phone with a rep and they said that you are already M2M with AT&T customers. It won't matter if you switch or not to an AT&T plan. The only advantage of switching is Rollover really.


Also, why would CellularOne build towers in Bay City and Saginaw? Because all they really did was make it so that their customers would have bad service. I mean, why would you want to have 1 bar of service with sucky reception and service when you could be receiving full service and crystal clear calls from AT&T's towers right over top of us. Bay City and Saginaw are immersed in AT&T coverage. If what you are saying is correct and they only built a couple towers, that was really pointless and it is doing more harm than good. Now nobody can make calls when they go over there unless they get far enough away from those towers.

[momcat1]

We're in the Poughkeepsie, NY area. I haven't changed or updated how my phone is configured. I haven't even left the local area in 2 months. So unless ATT sent some kind OTA update that changed how ATT phones react to the network, there's been no changes in the phone. I have narrowed down which tower is registering with a number of '0'. It's the one in Hopewell Junction, NY. Full signal but unusable. And this is a change of how this tower reads and responds in the past 2 weeks. For how strong this one is in that area, I am surprised that no Cell One customers there have noticed a problem. It's the only signal you can pick up in Hopewell on GSM.

[RadioFoneGuy]

Originally Posted by momcat1 We're in the Poughkeepsie, NY area. I haven't changed or updated how my phone is configured. I haven't even left the local area in 2 months. So unless ATT sent some kind OTA update that changed how ATT phones react to the network, there's been no changes in the phone. I have narrowed down which tower is registering with a number of '0'. It's the one in Hopewell Junction, NY. Full signal but unusable. And this is a change of how this tower reads and responds in the past 2 weeks. For how strong this one is in that area, I am surprised that no Cell One customers there have noticed a problem. It's the only signal you can pick up in Hopewell on GSM.

i dont think there will be a OTA untill closer to the 9th. is your phone in test mode? What model? What in the network id that you are on, also look at the BCCH. Some of those area are suppose to be divestest I wonder if ATT or the old dobson handset can run on those towers. Out of reasearch if you could ask a cell one customer in that area if they received a letter saying they were in a FCC controlled area that is the only sense I can make out of the network change.

[Andy]

Originally Posted by SmArTeStChIlD421 it said that mobile-to-mobile was a benefit of switching to an AT&T plans so no.....current Dobson customers who have not switched will not enjoy M2M to AT&Ts customer base unless they switch... i dont think they will need to force people to switch.....just the benefits i quoted should be enough....

I'm pretty sure that someone who is on an Unlimited Plan would not switch because of M2M "benefits", where they have unlimited anytime minutes now...

[momcat1]

Originally Posted by RadioFoneGuy i dont think there will be a OTA untill closer to the 9th. is your phone in test mode? What model? What in the network id that you are on, also look at the BCCH. Some of those area are suppose to be divestest I wonder if ATT or the old dobson handset can run on those towers. Out of reasearch if you could ask a cell one customer in that area if they received a letter saying they were in a FCC controlled area that is the only sense I can make out of the network change.

No, my phone can't be put in test mode. It's a Nokia N75, Symbian, and ATT and Nokia have all the good stuff blocked. I'm pretty sure the area is not being divested; the Cell One stores already have ATT banners on them. The network ID is 410. If they divest this area, there won't be enough ATT signal to do anything. We've been heavily relying on Cell One towers to have any service for two years.

[SmArTeStChIlD421]

Originally Posted by Andy I'm pretty sure that someone who is on an Unlimited Plan would not switch because of M2M "benefits", where they have unlimited anytime minutes now...

good point.......but at some point aren't they gonna force people to switch like they did with the Cingy/ATTW merger???