Commnet wireless being bought by Atlantic Tele-Network

[Fire14]

I have never heard of Commnet wireless, has anyone else heard of them or what name service they go under?

Atlantic Tele-Network to Purchase Commnet Wireless

July 27, 2005 | 10:04 AM

Atlantic Tele-Network, Inc. (ATN) has signed a definitive agreement to purchase 95% of Commnet Wireless LLC in a cash transaction valued at approximately $59 million, including the repayment of approximately $5.4 million in Commnet debt. Commnet is a privately held owner and operator of wireless voice and data roaming networks in rural markets throughout the United States. Commnet is expected to generate total revenues and cash flow from operations in 2005 of approximately $23 million and $8.5 million, respectively.

ATN will fund the purchase through a combination of cash on hand and bank debt. ATN has received a conditional commitment for the required financing from a major U.S. financial institution. Post-closing, ATN expects to have up to approximately $60 million in consolidated debt outstanding, as compared to approximately $12 million as of June 30, 2005. With estimated stockholder's equity of approximately $110 million on June 30, 2005, the transaction should leave ATN with a ratio of common equity to total capital of approximately 65%.

Management expects the transaction to close early in the fourth quarter of 2005. There are a number of customary conditions to completing the proposed transaction, including the approval of regulatory authorities and consummation of the debt financing. If closing occurs when expected, management anticipates that the transaction will be accretive to ATN's earnings. However, due to a number of uncertainties, including the precise allocation of the purchase price to amortizing and non-amortizing intangible assets, the amount of potential accretive earnings cannot be determined at this time. It is even possible, although management thinks that it is unlikely, that the purchase price allocation could result in the transaction being modestly dilutive to net income initially.

Commnet serves national, regional and local mobile carriers by providing them with low-cost roaming services and related network support in areas that would otherwise not be cost-effective for those carriers to cover. Commnet owns and operates mobile wireless networks in rural areas of Arizona, California, Colorado, Florida, Illinois, Missouri, Montana, New Mexico, North and South Dakota, Tennessee, and Wyoming. Post-acquisition, Commnet will become a subsidiary of ATN and will continue to be managed by Brian Schuchman and his management team. Schuchman will remain a 5% owner of Commnet.

"As our stockholders know," said Cornelius B. Prior, Jr., Chairman and CEO of ATN, "we have been looking for opportunities to acquire attractive telecom operating assets to balance our existing investments in the Caribbean. Commnet also continues our investment emphasis on wireless service in recent years, as we have grown to over 200,000 mobile subscribers today in Guyana and Bermuda. Commnet's carrier-to-carrier wireless operations are a good addition, providing us with another stable communications property operating in a smaller niche market with a manageable competitive environment."

"Commnet is profitable and the management team has successfully overseen substantial growth in the size and breadth of their business without sacrificing quality of service. This transaction provides a promising new source of revenue and earnings, as well as an opportunity for additional U.S. mainland investments, as Commnet seeks to expand the technological scope and geographical reach of its services,” he added.

"We are delighted to join forces with ATN," said Brian A. Schuchman, Chairman and Chief Executive Officer of Commnet. "They share our strategic vision, have a proven track record of investing in and operating successful wireless telecommunications companies, and will only enhance the value we are delivering to our customers."

Louis J. Tomasetti, President of Commnet, added, "ATN provides us with additional access to growth capital and other technical resources that will allow us to expand our network in response to the needs of our customers. With ATN's assistance, we will continue to invest in additional network capabilities and geographic coverage and provide next-generation quality and features to our customers in under-served areas in the United States and abroad."

Raymond James served as financial advisers to Commnet. Edwards & Angell LLP and Kelley, Drye & Warren served as counsel to ATN. Weil, Gotshal & Manges, LLP and Brown, Nietert and Kaufman served as counsel to Commnet and its selling equity holders, which include Summit Partners, a private equity firm that invested in the company in 2003.

Atlantic Tele-Network, Inc. is a telecommunications company with headquarters in St. Thomas, U.S. Virgin Islands. Its principal subsidiary, Guyana Telephone and Telegraph Company, Limited, is 80% owned by ATN and is the national telephone service provider in the Cooperative Republic of Guyana for all local, long-distance and international service, as well as the largest cellular service provider. ATN also owns 44% of Bermuda Digital Communications Ltd., providing cellular voice and data services in Bermuda as Cellular One; 100% of Choice Communications, LLC, providing wireless television and broadband and dial-up data services as the largest Internet service provider and the only wireless TV provider in the United States Virgin Islands.

Commnet Wireless, LLC, headquartered in Atlanta, Georgia, is a network-based provider of wholesale wireless services. Through strategic roaming alliances with national, regional and local wireless carriers, the Company provides its partners with affordable roaming voice and data services in rural areas throughout the United States. Commnet Wireless currently operates networks with GSM/GPRS, TDMA, CDMA and analog technologies in both the 850 MHz and 1900 MHz bands.

[Andy]

http://www.commnetwireless.com/

I don't think they have a lot of CDMA up, since the Commnet networks that are in Verizon's PRL are all marked as (A). I wonder if they will upgrade the network to do CDMA.

[agentHibby]

They will probably in a year have Verizon buy it and they will get back there rural coverage they lost.
Then again maybe not.

Surprized Commnet sold out. They have been buying PCS licenses that nobody wants as of late. I do think if you don't have customers making money on roaming is not going to work.

[Andy]

Doesn't Verizon roam on them though?

[agentHibby]

Yes Verizon has roaming aggrement on most of the network out west.

Interesting to see what Atlantic-Tele-Network does

[Fire14]

I noticed 2 interesting things, 1st is this page http://www.commnetwireless.com/Subscription.shtml recommending Wireless advisor for carriers in someones area
And 2, the areas in the coverage maps showing future TDMA/Analog coverage.

[Andy]

Originally Posted by Fire14

I noticed 2 interesting things, 1st is this page http://www.commnetwireless.com/Subscription.shtml recommending Wireless advisor for carriers in someones area
And 2, the areas in the coverage maps showing future TDMA/Analog coverage.

And it doesn't even show CDMA coverage, even though the press release says they have CDMA up, but Verizon's PRL only has their networks in as Analog...weird! Looks interesting that they show apparently are still building out AMPS and TDMA.

[agentHibby]

BillRadio knows them very well and could tell us what is going on.

[Andy]

True, I guess we'll wait for Bill to chime in

[Matt]

T-Mobile just entered into a roaming agreement with Commnet. I hadn't heard of them before then.

[Fire14]

Originally Posted by agentHibby

BillRadio knows them very well and could tell us what is going on.

Maybe that is why "Wireless Advisor" is recommended on there site.
As for CDMA, yes the press release say's they cover it, but the site doesn't mention it, which is wierd.

[roamer1]

Originally Posted by Matt

T-Mobile just entered into a roaming agreement with Commnet. I hadn't heard of them before then.

"just"? T-Mobile has had roaming on 311-040 since late last year!

I guess you don't read my posts very much ...I've known of Commnet since sometime in late 2002, when I passed through Mountain City, TN in a quest to find out who the A-side 850 carrier was there and ran across them and their cell site backhauled from Tennessee to Arizona.

-SC

[roamer1]

Originally Posted by agentHibby

I do think if you don't have customers making money on roaming is not going to work.

Think again.

-SC

[roamer1]

Originally Posted by Andy84094

Doesn't Verizon roam on them though?

There aren't that many carriers that don't roam on Commnet. All the majors definitely do (although Sprint seems to avoid them more often than not.)

-SC

[roamer1]

Interesting.

I don't see very much changing at Commnet, except perhaps for some more CDMA and some expansion now that they have a new source of funding.

-SC

[Matt]

Originally Posted by roamer1

"just"? T-Mobile has had roaming on 311-040 since late last year!

I guess you don't read my posts very much ...I've known of Commnet since sometime in late 2002, when I passed through Mountain City, TN in a quest to find out who the A-side 850 carrier was there and ran across them and their cell site backhauled from Tennessee to Arizona.

-SC

LOL. I always read your posts! TM has entered into a bunch of roaming agreements with smaller carriers recently, perhaps it was the "official" announcement. I'll see if I can dig anything up.

[Matt]

Originally Posted by Matt

LOL. I always read your posts! TM has entered into a bunch of roaming agreements with smaller carriers recently, perhaps it was the "official" announcement. I'll see if I can dig anything up.

April 2004 was the official beginning of Commnet roaming.