AT&T to acquire Alltel operations for $780 million

By Adam Zeis on 22 Jan 2013 09:22 am EST

AT&T has announced that it plans to acquire Alltel's US operations for $780 million. Alltel, which was largely swooped up by Verizon a few years back, has around 585,000 remaining subscribers. In addition to licenses and retails stores, AT&T will pick up all of the remaining wireless assets from Alltel if the deal goes through. The Alltel network still covers over 4.6 million users in states such as Idaho, Illinois, Ohio and Georgia. Check out the full press release below for more.

Press Release 

Atlantic Tele-Network, Inc. ATNI +1.50% , a telecommunications service provider to rural, niche and other under-served markets, today announced it has agreed to sell its domestic retail wireless business operated under the Alltel name by ATN's subsidiary Allied Wireless Communications Corporation ("Allied"). AT&T will purchase the operations in an all-cash transaction valued at approximately $780 million.

Allied, based in Little Rock, Arkansas, serves approximately 585,000 customers in rural areas of six states - Georgia, North Carolina, South Carolina, Illinois, Ohio and Idaho, and generated revenues for the first nine months of 2012 of approximately $350 million. In ATN's public filings, these operations are consolidated within its U.S. Wireless segment. These operations generated operating income estimated to be approximately $34 million, which is net of depreciation and amortization expense of approximately $42 million, for the first nine months of 2012.

"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. "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."

Commenting on the use of proceeds once the transaction is completed, Mr. Prior said, "We have a disciplined, long-term approach to managing our portfolio and intend to balance the use of the after-tax proceeds among new acquisition opportunities, a possible reduction in debt outstanding, investments in our existing lines of business and returns to shareholders through dividends."

The transaction is subject to customary closing terms and conditions and regulatory approval from the Department of Justice and the Federal Communications Commission. The companies expect to complete the transaction in the second half of 2013.

Following the close of the sale, Atlantic Tele-Network's businesses will consist of Commnet, serving rural communities primarily in the Southwest U.S.; Sovernet, serving residential and business customers in New England; ION, serving rural communities in New York State; GT&T, serving Guyana; CellOne, serving Bermuda; and Choice, Islandcom and Mio, serving portions of the Caribbean islands.

Stephens, Inc. is serving as financial advisor to Atlantic Tele-Network and provided a fairness opinion for the transaction. Cleary Gottlieb Steen & Hamilton LLP and Jenner & Block are providing legal counsel.

Adam Zeis Adam Zeis "Mobile Nations Content Strategist" 3740 (articles) 2892 (forum posts)

Reader comments

AT&T to acquire Alltel operations for $780 million


Interesting cellphone network news... but what exactly does this mean for BlackBerry... if anything?


This is great news for us alltel people! Alltel struggled to stay relevant, getting the 9900 just a couple months ago. Nothing had been said by alltel concerning BlackBerry 10 phones, maybe this will move things along.

I was an Alltel customer until 2 years ago when AT&T took over Alltel in our area. Get out they will give you 30 days to find a new carrier and get out of your contract. Do it don't give them a shot like I did At&t are the worst experience I have ever had with a cell phone company. That unlimited data plan that I love so much yea they will let you keep it as long as you never want a new device. The minute you try and upgrade they make you switch to one of their plans. And if you exceed 2 gb of data on your old so called unlimited plan they throttle you until your data and messaging are useless. They are in first place for bad service 5 years running for a reason. Save your self and switch. I didn't and wished I had. I am just thankful my contracts are up I will be getting my Blackberry 10 device from Sprint.

Yeah good luck with Sprint, They may be the cheapest but just remember you get what you pay for. I had a horrible experience with them the 4 years I had them.. Voice was fine but data is just awful.

I have ATT and love it. They don't make you switch from unlimited if you buy a new phone, and they don't throttle speeds at 2GB. They only throttle your speeds if you hit the top 5% of data users (hard to do since s use less data than other phones). Enjoy Sprint's over taxed network. You'll love dropping calls when you still have full signal.

+1 Been with AT&T for a long time. Always had good customer service, upgrades a lot of phones and still have my unlimited plan (They even put me back on my unlimited plan coming back from deployment when I reactivated my phone!)

Good luck with that. Sprint said they won't have BB10 until "later this year". When BB10 hits VZW, I'm ditching Sprint after 10 long years of poor reception, slow data (even in good reception areas), and the tendency of the price of my contract to go up and up even though I was under contract. I had to replace my Blackberry and when I activated the new one (which I payed for out of pocket) I got hit with an additional $10/month smartphone fee even though I had the same phone before with no fee.

My question is Alltel's network is CDMA, while AT&T is GSM, how will my Alltel phone work on their network?

The upside to this is we will have the opportunity to get a BB10 phone a couple of years earlier! Remember Alltel did not even offer the Ifone!

my opinion on a CDMA company being taken over by a GSM based company is, your alltel CDMA phones will still work as AT&T would keep the CDMA system up and running until all subscribers who is running on CDMA are due for upgrades or decides to switch.

This happened here with Rogers when they switched over in the 90's and when Bell, Telus, Koodo, and Virgin did the switch in the early half of 2000's. Till this day, the CDMA towers of Bell and Telus are still in operation (Koodo is owned by Telus and Virgin is owned by Bell)..... but since their switch, CDMA devices have almost disappear from stores except maybe for 1 or 2 CDMA units ..... aimed for users who are in areas where HSPA(Sim based) havent been in place.

When all of their towers have been upgradedor replaced with to HSPA+ then eventually all CDMA Handsets will cease to exist in their respective stores like Rogers now. As for the CDMA network, i dont think theyre going to turn it off just yet as they, both companies combined, still have a handful of CDMA subscribers. Further more, to serve Verizon and Sprint as roaming partners here in Canada. i think, it took Rogers.... about 8 years to finally switch/filter out CDMA over to GPRS/EDGE completely (subscriber wise) dont take my word for on his.

As for Fido(owned by Rogers), Fido was the first cellular provider who ran on SIM cards from the day they launched, back in around 1996.