AT&T snaps up Verizon assets

Nationwide US carrier AT&T has announced that it is to buy wireless assets from Verizon Wireless — including licences, network assets and 1.5 million subscribers — for $2.35bn in cash.

The assets, in 79 service areas of the US across 18 states, are principally rural. Verizon is required to offload the properties as part of the regulatory approval of its purchase of Alltel, which was given earlier this year.

The states represented are: Alabama, Arizona, California, Colorado, Iowa, Kansas, Michigan, Minnesota, Montana, Nebraska, Nevada, New Mexico, North Dakota, South Dakota, Tennessee, Utah, Virginia and Wyoming.

AT&T said it expects the deal to close in the fourth quarter of this year and that it will need to spend around $400m converting the newly acquired networks from CDMA-family to GSM-family technology. This process should take no more than a year, the firm said.

“Wireless continues to be AT&T’s greatest growth driver, and this transaction will complement our existing network coverage, particularly in rural areas,” said Ralph de la Vega, president and CEO, AT&T Mobility and Consumer Markets. “The acquisition will add network assets, distribution channels and 850 MHz spectrum in a significant portion of the US, enabling even better coverage for AT&T’s subscribers in those areas.”

He added: “The subscribers who join the AT&T family will realise significant benefits, including access to AT&T’s 3G broadband network — the nation’s fastest — and to an industry-leading line-up of iconic devices — from the latest smartphones for business users to quick messaging phones for texting teens.”

The $2.35bn purchase cost will be slightly offset  by another deal announced by AT&T that will see it sell certain wireless assets of Centennial Communications Corp. to Verizon for $240 million. This transaction is contingent on completion of AT&T’s acquisition of Centennial, which is still pending.