AT&T to acquire Alltel's spectrum, remaining customers for $780M

January 22, 2013 | By Phil Goldstein

AT&T Mobility (NYSE:T) said it will acquire Atlantic Tele-Network's retail wireless business, which still operates under the Alltel brand, for $780 million, in a deal that could give AT&T more spectrum holdings in key bands.

Under the deal, AT&T will get wireless properties including licenses, network assets, retail stores and approximately 585,000 subscribers. The Alltel network covers around 4.6 million people in primarily rural areas across Georgia, Idaho, Illinois, North Carolina, Ohio and South Carolina. In 2010, ATN purchased for $200 million Alltel assets divested by Verizon Wireless (NYSE:VZ) as part of Verizon's larger deal for Alltel.

AT&T's acquisition includes spectrum in the 700 MHz, 850 MHz and 1900 MHz bands and is largely complementary to AT&T's existing network. ATN also currently operates a retail CDMA network for its subscribers in these areas; AT&T is a GSM carrier so it will need to convert these customers to its network. AT&T said it expects that as it upgrades the network, the Alltel customers and existing AT&T customers who roam in these areas will enjoy enhanced mobile data service.

The companies noted that the FCC and Department of Justice need to approve the deal; they said they expected it to close in the second half of 2013.

For AT&T, the deal represents its latest move to acquire pieces of spectrum to enhance its LTE network and other mobile data services following its failed bid to acquire T-Mobile USA for $39 billion. AT&T last year received approval from the FCC to acquire a trove of new spectrum in the AWS and 2.3 GHz WCS bands, which it intends to use for LTE service in the years ahead. AT&T got spectrum from NextWave Wireless as well as from Comcast, Horizon Wi-Com and San Diego Gas & Electric Company.

AT&T's deal for ATN also represents the last bit of Alltel being absorbed into a Tier 1 carrier. ATN had maintained the Alltel brand and many of the company's well-known products, including the My Circle group calling plan. Verizon's $28.1 billion acquisition of Alltel closed in January 2009.