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

by Lance Turner  on Tuesday, Jan. 22, 2013 7:38 am  

Frank O'Mara, CEO of Allied Wireless Communications of Little Rock. (Photo by Michael Baxley)

Atlantic Tele-Network Inc. of Beverly, Mass., a rural and niche telecommunications services provider, said Tuesday that it is selling its domestic retail wireless business -- operated by subsidiary Allied Wireless Communications Corp. of Little Rock using the Alltel name -- to AT&T of Dallas in an all-cash deal worth about $780 million.

Allied Wireless was formed from divested Alltel assets after Alltel sold to Verizon for $28 billion in 2008. Allied has about 585,000 customers in rural areas of six states: Georgia, North Carolina, South Carolina, Illinois, Ohio and Idaho. Atlantic Tele-Network said Allied generated about $350 million in revenue in the first nine months of 2012.

The deal, subject to regulatory approval, is expected to close in second half of 2013. Stephens Inc. of Little Rock advised Altantic Tele-Network on the sale.

It was unclear from the announcement what the deal would mean for Allied Wireless's Little Rock headquarters. Atlantic Tele-Network did not discuss Little Rock in a 9 a.m. conference call with investors, and local officials would not comment.

In September 2009, Atlantic Tele-Network announced that Frank O'Mara would run the Alltel divestiture unit as CEO of Allied Wireless Communications. O'Mara, former executive vice president of marketing at Alltel, spent 13 years with the Little Rock telecom before it sold to Verizon.

In December 2009, Allied announced it would invest $200 million to establish its headquarters in a building formerly occupied by Acxiom Corp. on Technology Drive in west Little Rock. The company said the operation would add between 200 and 250 jobs in central Arkansas.

Allied received state incentives for the headquarters: $5 million from the governor's quick action closing fund for retrofitting, equipment and training; sales tax returns on eligibile building equipment and machinery; and a 5 percent cash rebate on new payroll for the next five years.

As of late 2010, Allied Wireless leased 75,000 SF in the 100,000-SF building.

After the sale of the Alltel business, Atlantic Tele-Network says its 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. 

"We are pleased that AT&T recognizes the value of our U.S. wireless retail operations and is acquiring these assets," Michael T. Prior, Atlantic's CEO, said in a news release. "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."

The purchase adds to AT&T's portfolio of assets that were divested by Verizon and Alltel in the wake of Verizon's purchase of Alltel's wireless business. In 2009, AT&T paid Verizon $2.35 billion for wireless licenses, network assets and 1.5 million subscribers in rural areas across 18 states.

 

 

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