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Alltel Takes Over AT&T Wireless’ Subscribers in Oklahoma City Region

November 30, 2004

Nov. 27–The wait for new cellular identity is over for subscribers of the former AT&T Wireless in Oklahoma City and 12 surrounding counties.

Officials with Little Rock, Ark.-based Alltel said Friday that the company has agreed to buy the former AT&T Wireless assets in Oklahoma and five other markets from Cingular Wireless for $170 million.

Cingular acquired the Oklahoma City and surrounding properties last month when it bought AT&T Wireless but was forced by federal regulators to sell the assets because of antitrust reasons.

Cingular became the nation’s largest wireless carrier with 46 subscribers in the wake of the AT&T Wireless buyout.

But the purchase announced Friday gives Alltel a long-sought entrance into the Oklahoma City market, said Scott Ford, its president and chief executive officer.

“We’ve tried to get into Oklahoma for a long time,” Ford said in a telephone interview from his Little Rock office Friday morning. “Neither us nor Verizon were able to crack the code.”

In addition to Oklahoma City, Alltel’s new Oklahoma properties includes network and subscribers in Oklahoma, McClain, Cleveland, Pottawatome, Canadian, Lincoln, Logan, Payne, Pawnee, Noble, Kay and Grant counties.

Alltel is the nation’s largest “regional” carrier with about 8.2 million cellular subscribers in 26 states, Ford said. It is the nation’s sixth-largest wireless company overall.

Alltel has a long-term roaming agreement with Verizon, the nation’s second-largest wireless company, which provides its subscribers nationwide coverage.

“The combined Alltel-Verizon network is about 40 percent bigger than the old AT&T network,” Ford said.

Ford said Alltel will “overlay” the old AT&T Wireless network in Oklahoma with its own CDMA technology that provides the same advanced high speed Internet capabilities and other features to which wireless customers have become accustomed.

“When we turn on our network, all of that will be up and running,” he said. “That should be the middle to late part of next year.”

The old AT&T Wireless technology will remain in place, meaning former AT&T Wireless customers will be able to use their current telephone to access the network, he said. The deal is expected to close in the first quarter of 2005.

It will be up to Alltel to win those AT&T Wireless subscribers when their contracts expire.

“If people will stay with us and give us a chance, I think they will be very pleased,” Ford said.

There should be no concern among AT&T Wireless customers about price increases with the new carrier, Ford said.

“In the modern era, people don’t raise rates,” he said. “The question is, how much better a network do you get for the lower price?

“Two things are bedrock issues. You have to have a great network, and you have to have a great price. If you are out of line on either of those, you are out of the ballgame.”

The company distinguishes from competitors on customer service issues, he said. It plans to “rebrand” the AT&T Wireless stores in Oklahoma and operate them as Alltel stores.

Alltel serves many midsized and large metropolitan markets, including Tampa, Fla.; Charlotte, N.C.; Roanoke, Va.; New Orleans, Little Rock, Ark.; Cleveland, and Albuquerque, N.M.

In addition to the Oklahoma properties it is acquiring from Cingular, the deal also includes assets in Kentucky, Texas, Connecticut, Mississippi and Kansas.

Alltel already provides wireless service to five counties in eastern Oklahoma. And it is a traditional wireline telephone service provider to more than 16,000 customers in 29 rural communities in Oklahoma, according to the Oklahoma Telephone Association.

Industry observer Bob Rader, senior vice president with Capital West Securities, said Oklahoma City subscribers of the former AT&T Wireless should see some tempting offers as Alltel tries to keep them from fleeing after the takeover.

“This is a very, very competitive market,” Rader said. “I think Cingular and everybody else will come out shooting at them with both barrels. But on the other hand, it would not surprise me if Alltel would also give some incentives for people to stay.”

That could mean special offers on phone upgrades, plans and prices, Rader said.

“Sweeten the pot a little bit to get people to stay with them,” he said.

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