AT&T buys rural CDMA player Alltel

US carrier AT&T said Tuesday it has agreed to acquire the retail wireless operations of Atlantic Tele-Network, which operates under the Alltel brand, for $780m in cash.

Under terms of the agreement, AT&T will acquire wireless properties, including licenses, network assets, retail stores and approximately 585,000 subscribers.

The move will take AT&T’s subscriber base to just over 107 million, putting it about seven million customers behind market leader Verizon.

Alltel’s CDMA network covers approximately 4.6 million people in primarily rural areas across six states — Georgia, Idaho, Illinois, North Carolina, Ohio and South Carolina. The acquisition includes spectrum in the 700MHz, 850MHz and 1900MHz bands and is largely complementary to AT&T’s existing network.

AT&T will convert the network to WCDMA to bring it in line with its own operations, and said it expects integration costs for the network conversion will not result in significant dilution to EPS or impact to cash flow. The transaction is subject to review by the Federal Communications Commission and the Department of Justice and to other customary closing conditions and is expected to close in the second half of 2013.

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