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AT&T said to be likely winner of most Verizon Alltel assets

AT&T may pay $2.5 billion for 75% of the wireless assets at auction. Blackstone Group, KKR & Co., Carlyle Group and U.S. Cellular Corp. also submitted bids, sources say.

May 09, 2009|Associated Press

AT&T Inc. said Friday that it would buy the assets of Verizon Wireless in 79 mainly rural areas for $2.35 billion in a deal affecting 1.5 million cellphone subscribers.

Verizon Wireless was forced to sell the service areas, which are spread over 18 states, to satisfy regulatory conditions of its purchase of Alltel Corp. The areas are mainly Alltel territories that overlap with Verizon's own coverage. They also include some Verizon territories and areas covered by Rural Cellular, another carrier that Verizon bought last year.

Because AT&T's network isn't compatible with Alltel or Verizon phones, the 1.5 million affected subscribers would need new phones to use Dallas-based AT&T's network.

The states with areas included in the deal are Alabama, Arizona, California, Colorado, Iowa, Kansas, Michigan, Minnesota, Montana, Nebraska, Nevada, New Mexico, North Dakota, South Dakota, Tennessee, Utah, Virginia and Wyoming.

The deal is expected to be finished by the fourth quarter.

Verizon Wireless is a joint venture of Verizon Communications Inc. of New York and Vodafone Group of Britain.

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