AT&T Buying Alltel Spectrum, Subscribers For $780M
January 22, 2013

AT&T Buying Alltel Spectrum, Subscribers For $780M

Peter Suciu for — Your Universe Online

As domestic mobile phone carriers look to expand their respective services one stumbling block comes up time and time again: spectrum. With so many consumers utilizing data-hogging smartphones, tablets and other devices, the digital spectrum is getting rather crowded. This is why some of the largest players in the mobile arena have been looking to acquire spectrum from their smaller counterparts.

On Tuesday AT&T, which is currently the second-largest U.S. wireless carrier, announced its intentions to purchase spectrum and subscribers from Atlantic Tele-Networks (ATNI) — which operates its retail business under the Alltel name — for $780 million in cash. This would further add 585,000 new customers to AT&T.

Alltell currently serves customers in Georgia, North Carolina, South Carolina, Illinois, Ohio and Idaho. It primarily serves rural, niche and under-served markets. Under the terms of the deal it will sell its retail wireless business operated under the Alltel name by ATNI´s subsidiary Allied Wireless Communications Corporation. Allied is based in Little Rock, Arkansas.

“We are pleased that AT&T recognizes the value of our U.S. wireless retail operations and is acquiring these assets,” said Michael T. Prior, chief executive officer at ATN, in a statement. “Alltel´s customers will benefit from access to a nationwide 4G network, a larger device selection, additional retail locations and a broader range of product offerings. Additionally, many of our employees should benefit from new career opportunities within AT&T. We will work closely with AT&T to close the transaction and to ensure a smooth transition for our customers and employees.”

For AT&T it will mean the addition of new subscribers but also a range of spectrum including the 700 MHz, 850 MHz and 1900 MHz bands, which will largely complement AT&T´s existing network, reported ZDnet.

AT&T expects that the Alltell purchase will be completed in the second half of 2013. This will require approval from both the Federal Communications Commission (FCC) and the Department of Justice (DOJ). This transaction follows more than 24 spectrum deals by AT&T in 2012. These included a $600 million purchase of NextWave Wireless, a plan with Sirius XM Radio Inc. to use its satellite signals and a radio-wave deal with Comcast and Horizon Wi-Com LLC, as well as a variety of smaller deals, according to a Bloomberg report.

Not all of AT&T´s attempts to acquire spectrum have been successful.

In 2011 the company attempted a $39 billion takeover of the fourth-largest U.S. carrier T-Mobile USA Inc. This was met with opposition by regulators and AT&T eventually walked away from the deal in December of 2011.

AT&T has previously reported that its data traffic has doubled annually and that demand for spectrum will exceed supply in some markets starting in 2013.

While AT&T will likely gain a portion of Alltel's business, the latter will not be completely out of the mobile phone services business.

Following the transaction, Alltel will still own several businesses that supply mobile service to rural customers. These include Commnet, which serves rural communities mostly in the Southwestern United States; Sovernet, which serves residential and business customers in England; and ION, which serves rural communities in New York State.

Additional businesses include GT&T, which serves Guyana; CellOne, which serves Bermuda; along with Choice, Islandcom and Mio, which serve various portions of the Caribbean islands.