Acquisition Enhances AT&T's Wireless Network Coverage in Rural Areas, Service for Businesses Operating in Puerto Rico
DALLAS, Nov 06, 2009 (BUSINESS WIRE) -- 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(R) Minutes, a
feature exclusive to AT&T, as well as a mobile-to-mobile calling
community of nearly 82 million(3) 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 America Movil. AT&T is a minority shareholder in America Movil,
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(R) 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.
(C) 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
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For more information, please review this announcement in the AT&T
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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.
SOURCE: AT&T Inc.
AT&T Inc.
McCall Butler, 212-453-2354
Mobile: 917-209-5792
E-mail: mbutler@attnews.us
Copyright Business Wire 2009
