Tuesday, January 22, 2013

Atlantic Tele-Network to Sell Alltel Business To AT&T For $780M

Alltel's retail shops, 585,000 customers and the chunks of the 700MHz, 900MHz and 1900MHz bands it operates will soon be part of the AT&T family. Pending an FCC review, of course. This morning the former Ma Bell announced that it would be purchasing the American assets of Atlantic Tele-Network, which uses the Alltel brand here in the US, for $780 million. While the additional customer revenue will surely be welcome, it's clear that AT&T is primarily after the spectrum here, which it calls "largely complimentary" to its current holdings. The smaller carrier is particularly popular in the rural areas of Georgia, Idaho, Illinois, North Carolina, Ohio and South Carolina places that the nation's second largest mobile network could use a boost in.
Besides regulatory approval, which shouldn't prove to be a major obstacle, the company also faces challenges integrating Alltel's existing infrastructure with its own. Currently the smaller carrier operates a CDMA network on its frequency bands, which must be retooled to work with AT&T's GSM, HSPA and LTE technologies. Customers will also need to be migrated from their current handsets to AT&T compatible ones. So, while rural customers could see a significant improvement in coverage, we wouldn't expect the deal to bear fruit immediately. 

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