Verizon Wireless Finds Buyer for Remaining Alltel Assets

Press release:

Atlantic Tele-Network to Acquire Divestiture Properties from Verizon Wireless

Business Wire SALEM, Mass. -- June 09, 2009 Atlantic Tele-Network, Inc. (NASDAQ:ATNI) today announced a definitive agreement to acquire certain wireless assets from Verizon Wireless for $200 million. Under terms of the agreement, ATN will acquire wireless properties, including wireless spectrum licenses and network assets,serving over 800,000 subscribers primarily in rural areas across Georgia,North Carolina, South Carolina, Illinois, Ohio, and Idaho. Verizon Wireless is required to divest these properties as part of the regulatory approvals granted for its purchase of Alltel earlier this year.

Under terms of the agreement, ATN will purchase the assets for $200 million in cash. ATN expects to fund substantially all of the purchase price with cash-on-hand and borrowings under its existing credit facility. As of April 30, 2009, ATN had approximately $90 million in cash and cash equivalents, $75 million of available borrowings under its undrawn revolving credit facility, and an additional $50 million of borrowing capacity, subject to lender consent, under its term credit facility.

The acquisition is subject to customary closing conditions and regulatory approvals, including the receipt of required consents and approvals from the Department of Justice (DOJ) and the Federal Communications Commission (FCC.) ATN’s obligation to close the transaction is not subject to any financing condition. ATN expects the transaction to close in the third or fourth quarter of 2009.

"This is a very attractive transaction for ATN and it accomplishes what we have been patiently seeking over the past few years," said Michael Prior,ATN’s President and Chief Executive Officer. "It provides ATN with enhanced scale and revenue diversification and enables us to expand meaningfully our US wireless business. Coupled with our existing US wireless operations, we will now have significant wireless operations in rural areas of more than 10 states. Including our international operations, we expect to have more than 1,000,000 retail wireless subscribers by transaction close. We believe that our long history of operating success in comparable markets, combined with our financial resources, makes these businesses an ideal fit for us. We aim to further develop these markets for customers who want the attention and flexibility of a local operator. We look forward to transitioning the employees and subscribers of the acquired businesses to ATN and to continue building our wireless business."

Verizon Wireless’ sale of the properties to Atlantic Tele-Network is subject to regulatory review and approval by the Department of Justice and the Federal Communications Commission. Atlantic Tele-Network, headquartered in Salem, MA, currently provides telecommunications services in the United States, Guyana, Bermuda, the U.S. Virgin Islands and Turks and Caicos. One of the company’s principal subsidiaries is Commnet Wireless, LLC, which provides voice and data wireless roaming services for U.S. and International carriers, including Verizon Wireless, in rural areas throughout the United States. Commnet Wireless works in partnership with national and regional wireless operators to offer highly-reliable, feature-rich coverage in a variety of technical environments. They currently manage wireless networks in 14 states and operate networks with CDMA, GSM/GPRS & EDGE technologies in both the 850 MHz & 1900 MHz bands

 

It seems very strange that USCC didn't buy any of the remainder of Alltel.

 

Commnet is mainly a "roaming only" network for roamers in some areas in the central & western US,
and Commnet doesn't retail their service, but maybe something new will come out of this.

This deal still has to be approved by the FCC, but would they approve it?
Probably not as VZW would still have a major hold on these areas, as Commnet doesn't sell service.

If they don't retail their service, Verizon would still have a near monopoly in many of these areas.
So really Verizon still benefits no matter what.

We'll see what happens though.

Also, Commnet is pretty much an Unknown name company to many of those in these areas.
If they want to keep customers, they should keep the Alltel name, and plans as is.
Otherwise watch how many people would jump to Verizon.

IMO only Idaho properties would be a good fit for Commnet.
Otherwise this is a win-win situation for Verizon.

 

Hopefully this Commnet transaction will go well... unlike AT&T and NEAT Wireless in Arkansas (when ATTWS and Cingular merged). At one point, NEAT ended up selling its users back to AT&T (but it kept the facilities). I wonder how NEAT is doing. I went to their site but there isn't much on it.

 

I put together all the important articles and Press Releases about ATN at:

Who Is Atlantic Tele-Network

They certainly do plan to offer retail cellular service as "an Attractive Alternative to National Carriers." Of all the changes to the divested properties, this has the potential to serve the affected Alltel customers the best.

 

wow, thanks, good infos.