AT&T buys Atlantic Tele-Network for $780 million to expand rural 4G

AT&T has closed on its $780 million acquisition of wireless phone operator Atlantic Tele-Network which will assist the telecom giant to expand rural 4G.

Atlantic Tele-Network operates under the Alltel brand which has 590,000 subscribers.

The network covers about 4.5 million mostly rural residents in Georgia, Idaho, Illinois, Ohio, North Carolina and South Carolina.

AT&T will begin upgrading the network and will roll out its 4G LTE service in former Alltel areas by late 2014.

Meanwhile, Dallas-based AT&T expects to show growth its smartphone base by 1 million in the quarter, with higher smartphone upgrades than a year earlier, followed by a year-over-year decline in upgrades in the fourth quarter.

Telecom operators including AT&T tend to report lower wireless profit margins in quarters of strong smartphone sales as they typically subsidize devices for customers who in turn commit to two-year contracts.

The company expects to reach 10 million total U-verse subscribers by the end of the third quarter and expects consumer wireline revenue growth for the third quarter to be consistent with second quarter 2013.


By the end of the third quarter AT&T also said it expects to reach 10 million total subscribers to its U-verse service, which includes home broadband and video. It said it expects consumer wireline revenue growth consistent with the second quarter.

However, AT&T is seeing pressure on legacy services and its overall wireline business revenue growth due to macroeconomic weakness even as its strategic business services are selling well.

The operator is not changing its full-year 2013 guidance from January when it forecast earnings per share growth in the upper-single digit percentage range or higher and revenue growth exceeding 2 percent.

AT&T is also exploring options such as a sale of its wireless broadcast towers but noted that its ability to reach a deal would depend on the terms it is able to reach with the buyer for its ongoing use of the towers.

Bloomberg reported earlier this week that AT&T had hired bankers for a sale of its towers that could fetch about $5 billion.

Potential acquirers could include Crown Castle International, American Tower and SBA Communications.

Meanwhile, Telecom Italia is considering a sale of its wireless towers. The carrier is weighing the creation of a company for about 12,000 mobile-phone towers before putting it up for sale. The assets could be valued at 500 million euros ($676 million) to 1 billion euros.

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