AT&T buys rural wireless network Alltel for $780 million
Jan 22 (Reuters) - AT&T will acquire the U.S. retail wireless operations of Atlantic Tele-Network for $780 million in cash, the telephone company said Tuesday, in a move that will boost AT&T's service in rural areas.
The network AT&T is buying from Atlantic Tele-Network is known under the brand "Alltel" in the U.S. and covers about 4.6 million people in mostly rural areas in the states of Georgia, Idaho, Illinois, North Carolina, South Carolina and Ohio.
AT&T said the deal is expected to close in the second half of the year and is subject to review by the U.S. Federal Communications Commission and the Justice Department. The deal will not result in "significant" dilution to AT&T's earnings per share or impact its cash flow, according to a statement by AT&T. The spectrum AT&T is buying is complementary to its current network, the company said.
The telephone company said on Jan. 17 that it will take a fourth-quarter charge of about $10 billion due to bigger than expected pension obligations. It also expects to take a $175 million reduction in operating income because of storms including Superstorm Sandy, which damaged some of its infrastructure. Its wireless profit will also be reduced by higher than expected sales of smartphones such as the Apple Inc iPhone in the quarter.
Shares of Atlantic Tele-Network were halted before the market opened. AT&T shares fell to a low of $33.18, 1 percent below Friday's close but have since recovered to $33.44 to trade about flat in premarket trading.