AT&T Inc. (NYSE:T), the second biggest wireless carrier in the United States, said Tuesday that it has agreed to purchase the Alltel spectrum and subscribers for $780 million to strengthen its position in rural areas. The deal will bring 585,000 new customers to AT&T.
Under the deal, Texas-based AT&T Inc. (NYSE:T) will get network assets, licenses and retail stores. The Alltel spectra are in the bands of 700, 850 and 1900-MHz, which complement AT&T’s complete network. The Alltel brand is operated by Atlantic Tele-Network, Inc. (NASDAQ:ATNI) in six states – Idaho, Georgia, Illinois, Ohio, North Carolina and South Carolina. During the first nine months of 2012, Alltel generated a revenue of $350 million.
The following is our rough coverage of the 2021 Sohn Investment Conference, which is being held virtually and features Brad Gerstner, Bill Gurley, Octahedron's Ram Parameswaran, Glenernie's Andrew Nunneley, and Lux's Josh Wolfe. Q1 2021 hedge fund letters, conferences and more Keep checking back as we will be updating this post as the conference goes Read More
AT&T, led by Randall Stephenson, is aggressively buying airwaves to catch up with Verizon Communications Inc. (NYSE:VZ). Last year, Verizon Wireless bought airwave rights from Comcast Corporation (NASDAQ:CMCSA) and many other cable customers for more than $3.6 billion. Wireless service providers depend on the spectrum to transmit data and phone calls to mobile devices.
AT&T Inc. (NYSE:T) said that data traffic is doubling every year, and demand will soon exceed supply. As a result, the companies that own desirable airwaves are receiving overpriced bids.
The Atlantic Tele-Network, Inc. (NASDAQ:ATNI) bought Alltel operations from Verizon Communications Inc. (NYSE:VZ) for $223 million in 2010. Now AT&T is paying $780 million for the same operations, despite Alltel losing 200,000 subscribers in the past three years. That’s a successful investment for Atlantic Tele-Network.
The acquisition will be completed in the second half of 2013, if approved by the Department of Justice and the Federal Communications Commission. AT&T Inc. (NYSE:T) said the deal wouldn’t significantly affect its cash flow. Last year, AT&T completed 24 spectrum deals including the rights to use Sirius XM Radio Inc.’s (NASDAQ:SIRI) satellite signals, which was a result of a $600 million acquisition of Nextwave Wireless Inc. (PINK:WAVE). AT&T completed many other smaller deals with regional carriers.
In 2011, the company had also tried to purchase T-Mobile USA Inc for about $39 billion to address its spectrum needs. But AT&T backed off due to opposition by regulatory authorities.
AT&T Inc. (NYSE:T) shares were unchanged in early trading session. Atlantic Tele-Network, Inc. (NASDAQ:ATNI) shares surged 9.86 percent to $43.25 at 11:21 AM EST.