AT&T* today announced that it has completed its acquisition
of Centennial Communications Corp. (Nasdaq:CYCL). The acquisition
enhances AT&T’s network coverage across the Midwest and
Southeast United States and in Puerto Rico and the U.S. Virgin
Islands.
The combination of the two companies’ wireless networks will
allow AT&T to deliver broader wireless coverage, including to
approximately 893,000 former Centennial wireless subscribers.1 With
the addition of Centennial, AT&T also expands its wired network
coverage to Puerto Rico, enhancing service for its business
customers with operations there.
“The addition of Centennial will enhance AT&T’s assets in
wireless — a strategic priority and one of our biggest growth
drivers — and service for customers of both companies,” said Ralph
de la Vega, president and chief executive officer of AT&T
Mobility and Consumer Markets. “We’re excited to give Centennial
wireless subscribers access to the nation’s fastest 3G network plus
our premier lineup of smartphones and unmatched portfolio of
applications and services.
“We’ll also improve network reliability for our wireless
subscribers who will be able to make on-network calls in the
Centennial footprint,” said de la Vega. “And as Centennial’s
broadband network in Puerto Rico is integrated with AT&T’s
extensive global network and advanced service offerings, we’ll
offer corporations that operate in Puerto Rico the benefits of
end-to-end service over a single network.”
Integration Plans
AT&T plans to integrate Centennial’s networks and products
with AT&T’s networks and product portfolio. The transaction
extends AT&T’s wireless network coverage in primarily rural
areas of Indiana, Louisiana, Michigan, Ohio and Texas as well as
enhances coverage in Puerto Rico and the U.S. Virgin Islands.
In the mainland U.S., AT&T will move quickly to rebrand
Centennial as AT&T and to make AT&T’s innovative products
and services available to Centennial’s customers.2 By late January
2010, AT&T products and services will be available at more than
100 Centennial retail locations. Within the same timeframe,
AT&T signage will be installed in all Centennial locations.
Former Centennial wireless subscribers may keep their existing rate
plans, but they will also have the opportunity to migrate to
AT&T rate plans without activation or upgrade fees. Existing
AT&T customer contracts will not change.
In Puerto Rico, the Centennial brand will continue through
mid-2010. AT&T will honor the current rate plans and contracts
of Centennial wireless subscribers. AT&T expects to make the
full portfolio of AT&T products and services available in
Centennial locations in Puerto Rico in the third quarter of 2010.
At that point, Centennial customers will have the opportunity to
migrate to AT&T rate plans without activation or upgrade fees.
Existing AT&T customer contracts in Puerto Rico will not
change.
To provide the best experience possible for Centennial customers
who choose to migrate to AT&T service, prior to the transition,
AT&T plans to deploy 3G at more than 200 sites in Centennial’s
markets. This deployment plan includes adding 3G capabilities at
more than 100 sites and expanding 3G coverage and capacity at
approximately 100 sites.
Centennial customers who choose AT&T plans will enjoy
significant benefits as they join the AT&T network. AT&T
offers the best wireless coverage worldwide, with more phones
working in more places; more applications running over its network;
and access to the nation’s fastest 3G network, which will get even
faster as AT&T rolls out HSPA 7.2 technology in advance of its
deployment of 4G LTE service. And unlike other wireless networks,
AT&T’s network enables subscribers to talk and e-mail or surf
the Web at the same time — one of the reasons, along with the
industry’s leading lineup of devices, that significantly more
smartphone users have chosen AT&T over other wireless carriers.
Centennial customers who choose select smartphones and
LaptopConnect cards will have access to AT&T’s Wi-Fi hot spot
network, the largest in the U.S. with more than 20,000 hot spots,
at no additional charge. AT&T will also offer Centennial
subscribers Rollover® Minutes, a feature exclusive to AT&T, as
well as a mobile-to-mobile calling community of nearly 82 million3
members.
Centennial’s wired network assets in Puerto Rico will also allow
AT&T to better serve business customers with a presence in
Puerto Rico. AT&T will continue to provide switched voice,
high-capacity data and Internet Protocol solutions for business
customers in Puerto Rico. Existing Centennial customers will now
have access to new technologies, to AT&T’s innovative products
and to both wireline and wireless services from AT&T.
Merger Synergies and Financials
The acquisition of Centennial will provide AT&T
opportunities for synergies in areas such as corporate functions,
advertising, customer care and network operations. AT&T expects
upfront integration costs will result in minimal dilution to EPS
and cash flow in 2009. As previously announced, Centennial
stockholders will receive $8.50 per share in cash. Including net
debt, the transaction is valued at $2.7 billion. AT&T will take
prompt actions to redeem all of Centennial's outstanding debt under
its indentures and credit agreement.
Regulatory Approval Process
AT&T’s acquisition of Centennial has been reviewed and
approved by the Federal Communications Commission (FCC). Pursuant
to a consent decree, the U.S. Department of Justice (DOJ) and the
Attorney General of the State of Louisiana have agreed to permit
the merger to close.
As a result of the FCC and DOJ review processes, AT&T agreed
to divest operations in eight service areas: Alexandria, La.,
Lafayette, La., LA-3 (DeSoto), LA-5 (Beauregard), LA-6 (Iberville),
LA-7 (West Feliciana), MS-8 (Claiborne) and MS-9 (Copiah). Per the
terms of a definitive agreement signed in May 2009, AT&T has
agreed to divest to Verizon Wireless five of the Centennial service
areas covered under the DOJ ruling. These five service areas are
Lafayette, La., LA-5 (Beauregard), LA-6 (Iberville), LA-7 (West
Feliciana) and MS-8 (Claiborne). AT&T now expects that this
transaction will close in the first quarter of 2010, once the
companies obtain regulatory approvals. AT&T also has a
definitive agreement with Verizon Wireless to acquire wireless
properties Verizon Wireless is divesting as a result of its
acquisition of Alltel. That transaction is also subject to
regulatory approvals and is expected to close in the fourth quarter
of 2009.
To secure FCC approval of the transaction, AT&T committed to
honor agreements for roaming on Centennial’s network. AT&T will
honor existing roaming agreements with other carriers for the life
of the contract — or, for carriers with fewer than 10 million
subscribers, will maintain the roaming agreement for at least four
years or the full term of the agreement with Centennial, whichever
is longer. AT&T also agreed to certain measures restricting the
flow of competitive information between AT&T and América Móvil.
AT&T is a minority shareholder in América Móvil, which also
provides telecommunications services in Puerto Rico.
1 Centennial subscriber figure represents the subscriber base
after divestitures of Centennial operations in eight service areas:
Alexandria, La., Lafayette, La., LA-3 (DeSoto), LA-5 (Beauregard),
LA-6 (Iberville), LA-7 (West Feliciana), MS-8 (Claiborne) and MS-9
(Copiah).
2 Any discussion of integration of Centennial into
AT&T's operations excludes the eight service areas to be
divested.
3 Mobile-to-mobile calling community includes the addition of
Centennial subscribers.
*AT&T products and services are provided or offered by
subsidiaries and affiliates of AT&T Inc. under the AT&T
brand and not by AT&T Inc.
About AT&T
AT&T Inc. (NYSE:T) is a premier communications holding
company. Its subsidiaries and affiliates, AT&T operating
companies, are the providers of AT&T services in the United
States and around the world. Among their offerings are the world's
most advanced IP-based business communications services, the
nation's fastest 3G network and the best wireless coverage
worldwide, and the nation's leading high speed Internet access and
voice services. In domestic markets, AT&T is known for the
directory publishing and advertising sales leadership of its Yellow
Pages and YELLOWPAGES.COM organizations, and the AT&T brand is
licensed to innovators in such fields as communications equipment.
As part of their three-screen integration strategy, AT&T
operating companies are expanding their TV entertainment offerings.
In 2009, AT&T again ranked No. 1 in the telecommunications
industry on FORTUNE® magazine's list of the World's Most Admired
Companies. Additional information about AT&T Inc. and the
products and services provided by AT&T subsidiaries and
affiliates is available at http://www.att.com.
© 2009 AT&T Intellectual Property. All rights reserved.
AT&T, the AT&T logo and all other marks contained herein
are trademarks of AT&T Intellectual Property and/or AT&T
affiliated companies. All other marks contained herein are the
property of their respective owners.
Note: This AT&T news release and other announcements are
available as part of an RSS feed at www.att.com/rss. For more
information, please review this announcement in the AT&T
newsroom at http://www.att.com/newsroom.
Cautionary Language Concerning Forward-Looking
Statements
Information set forth in this news release contains financial
estimates and other forward-looking statements that are subject to
risks and uncertainties, and actual results may differ materially.
A discussion of factors that may affect future results is contained
in AT&T's filings with the Securities and Exchange Commission.
AT&T disclaims any obligation to update or revise statements
contained in this news release based on new information or
otherwise.
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