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Cingular to Sell Some Former AT&T Wireless Customers to ALLTEL

Posted on: Monday, 13 December 2004, 21:00 CST

Dec. 14--Former AT&T Wireless Services Inc. customers in Litchfield County will soon have a new cell phone company, but it won't be Cingular Wireless.

Atlanta-based Cingular, the nation's largest wireless communications company, acquired AT&T Wireless in a $41 billion deal that was completed in late October following the approval of the antitrust regulators. As part of that deal, Cingular will sell former AT&T Wireless licenses, facilities and subscribers in Litchfield County to ALLTEL, based in Little Rock, Ark.

The Litchfield County customers will be ALLTEL's first in Connecticut.

State Attorney General Richard Blumenthal said Monday his office has concerns about the deal and will continue to work closely with the U.S. Justice Department in reviewing the transaction's pros and cons.

"ALLTEL is new to this market, and our concern is it may not prove to be as strong a competitor as (Litchfield County) consumers deserve," Blumenthal said.

There are about 11,000 former AT&T customers in Litchfield County, he said, a number neither ALLTEL nor Cingular could confirm Monday.

David Avery, a spokesman for ALLTEL, said his company will gain about 200,000 customers overall in the Cingular deal, but that the customer count has yet to be broken down by state.

The deal was made to satisfy divestiture obligations imposed by the Federal Communications Commission and Justice Department as conditions of their approval of Cingular's merger with AT&T Wireless, said Kaufman, Cingular's manager of public relations for the Northeast region. The deal will enable Cingular, which has about 47.6 million customers nationwide, to satisfy a "substantial portion" of the divestiture obligation, she said.

Kaufman said that Cingular's divestiture obligations will affect about 230,000 former AT&T customers nationwide.

In addition to customers in Litchfield County, ALLTEL will also buy AT&T Wireless' licenses, facilities and subscribers in Oklahoma City and Grant, Okla.; Sherman-Denison and Jack, Texas; Owensboro and Fulton, Ky.; and Yalobusha, Miss. Cingular also has agreed to include 20MHz of spectrum and former AT&T Wireless network assets in Wichita, Kan. and wireless spectrum in several counties in Georgia and Texas as part of the deal.

Spectrum is the frequency at which wireless companies provide their services, Kaufman said. Different wireless companies operate at different points of the spectrum, she said.

In return, Cingular will receive $170 million in cash. ALLTEL has also agreed to swap a number of partnership interests, with Cingular receiving interests in such markets as Wichita, Kansas City, Milwaukee, and several in Texas. ALLTEL, in turn, will gain a greater ownership percentage in markets in Michigan, northern Louisiana and Toledo, Ohio.

Only former AT&T customers in Litchfield County and the other areas will be assigned to ALLTEL as a result of the deal, Kaufman said. Cingular customers in those areas will retain Cingular as their wireless service provider.

The deal is expected to close during the first three months of 2005, pending FCC and Justice Department approval, Avery said.

ALLTEL is a communications company with about 13 million customers and $8 billion in annual revenues. It provides wireless, local telephone, long-distance, Internet and high-speed data services to residential and business customers in 26 states.

Prior to entering Connecticut through the Cingular deal, the company's closest operation was in the Jamestown, N.Y. area, where it runs the local telephone service, Avery said.

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Source: Waterbury Republican-American

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