AT&T acquisition to beef up 3G coverage in rural US
AT&T on Friday confirmed plans to acquire wireless properties from rival Verizon in a bid to strengthen coverage of its 3G network in rural areas of the US stretching across some 18 states.
The deal for $2.35 billion in cash will see the exclusive US iPhone carrier take control of 18 of the 24 markets that Verizon is divesting as part of its recent acquisition of Alltel Wireless, which helped the telecommunications firm snatch the title of the largest US wireless carrier away from AT&T.
More specifically, Friday's agreement will see AT&T acquire wireless properties, including licenses, network assets and 1.5 million current subscribers in 79 service areas, primarily in rural areas of Alabama, Arizona, California, Colorado, Iowa, Kansas, Michigan, Minnesota, Montana, Nebraska, Nevada, New Mexico, North Dakota, South Dakota, Tennessee, Utah, Virginia and Wyoming.
"Wireless continues to be AT&T?s greatest growth driver, and this transaction will complement our existing network coverage, particularly in rural areas," said AT&T chief executive Ralph de la Vega. "The acquisition will add network assets, distribution channels and 850 MHz spectrum in a significant portion of the U.S., enabling even better coverage for AT&T?s subscribers in those areas."
Converting those markets from Verizon?s CDMA network to GSM technology and transitioning operations to AT&T is expected to take about 12 months and cost about $400 million. Once the transition is complete, subscribers in those areas will be able to take advantage of AT&T's 3G network and supporting devices like the iPhone and BlackBerry Bold.
AT&T told investors the deal is expected to deliver substantial long-term stockholder value. It's the latest move on the part of the Dallas-based company to build out its mobile data services, which represent its key area of growth. In 2008, AT&T pumped more than $15 billion into building out its wireless network.
The deal for $2.35 billion in cash will see the exclusive US iPhone carrier take control of 18 of the 24 markets that Verizon is divesting as part of its recent acquisition of Alltel Wireless, which helped the telecommunications firm snatch the title of the largest US wireless carrier away from AT&T.
More specifically, Friday's agreement will see AT&T acquire wireless properties, including licenses, network assets and 1.5 million current subscribers in 79 service areas, primarily in rural areas of Alabama, Arizona, California, Colorado, Iowa, Kansas, Michigan, Minnesota, Montana, Nebraska, Nevada, New Mexico, North Dakota, South Dakota, Tennessee, Utah, Virginia and Wyoming.
"Wireless continues to be AT&T?s greatest growth driver, and this transaction will complement our existing network coverage, particularly in rural areas," said AT&T chief executive Ralph de la Vega. "The acquisition will add network assets, distribution channels and 850 MHz spectrum in a significant portion of the U.S., enabling even better coverage for AT&T?s subscribers in those areas."
Converting those markets from Verizon?s CDMA network to GSM technology and transitioning operations to AT&T is expected to take about 12 months and cost about $400 million. Once the transition is complete, subscribers in those areas will be able to take advantage of AT&T's 3G network and supporting devices like the iPhone and BlackBerry Bold.
AT&T told investors the deal is expected to deliver substantial long-term stockholder value. It's the latest move on the part of the Dallas-based company to build out its mobile data services, which represent its key area of growth. In 2008, AT&T pumped more than $15 billion into building out its wireless network.
Comments
Q: Are the tower placements for CDMA (I assume these were the previous AMPS towers) also ideal for GSM on the 850MHz spectrum?
Q: How will they transition the Alltel users from CDMA to GSM? Have both technologies running at the same time for certain duration and then offer the stragglers a cheap GSM phone when they plan to cut off the CDMA? How did they do it last year when switching out all the AMPS for CDMA?
to complain, than to be the champion, eh, Verison?
If that was a joke, I don't get it. This is not a surprise, nor is it bad news for Verizon. Verizon knew all along that it would have to divest some assets as a condition of gaining approval for its deal to acquire Alltel.
(source)
Good, AT&T needs to beef up their rural areas.
Q: Are the tower placements for CDMA (I assume these were the previous AMPS towers) also ideal for GSM on the 850MHz spectrum?
Q: How will they transition the Alltel users from CDMA to GSM? Have both technologies running at the same time for certain duration and then offer the stragglers a cheap GSM phone when they plan to cut off the CDMA? How did they do it last year when switching out all the AMPS for CDMA?
UMTS uses wider channels than CDMA and asynch tech over 5 MHz channel. CDMA uses synch tech over 1.25 MHz... and most of the data will go over a separate EVDO channel. This will be a "truckload" upgrade. Power control will be the key so that hand-offs go smooth and the handset power control is not boosted to hi and drain the batteries.
The good part is that 850 MHz has good wave propagation characteristics and that may help.
If that was a joke, I don't get it. This is not a surprise, nor is it bad news for Verizon. Verizon knew all along that it would have to divest some assets as a condition of gaining approval for its deal to acquire Alltel.
(source)
That's probably not a surprise for them. But I wouldn't say, they want it that badly. Let's call it a compromise.
That's probably not a surprise for them. But I wouldn't say, they want it that badly. Let's call it a compromise.
Verizon loses a net of 1.3M subscribers while AT&T nets 1.3M subs. Verizon isn't so far ahead of AT&T in that regard to want to lose 10% of the subscriber base of the Alltel buyout. Verizon still has more coverage than AT&T, but even that will be dwindling as AT&T builds out in Alltel's more rural areas with 3G. I don't think Verizon wanted to do it at all.
Verizon loses a net of 1.3M subscribers while AT&T nets 1.3M subs. Verizon isn't so far ahead of AT&T in that regard to want to lose 10% of the subscriber base of the Alltel buyout. Verizon still has more coverage than AT&T, but even that will be dwindling as AT&T builds out in Alltel's more rural areas with 3G. I don't think Verizon wanted to do it at all.
They're losing customers? Even with a badass phone like the storm!? </sarcasm>
I remember when switching from tmobile and looking for a new provider, everyone insisted I get Verizon. Where I live (Virginia) I have yet to find a place where my friends don't have great service with Verizon. I guess that will change? It seems to me that neither customer support or phone selection have been Verizon's key selling point. They'll just have to improve on those two things now I guess.
distribution channels and 850 MHz spectrum in a significant portion of the U.S., enabling even better coverage for AT&T?s subscribers in those areas."
And maybe improved signal quality too since 850 MHz should penetrate into buildings better than 1900 or 2100
verizon news release - http://news.vzw.com/news/2009/01/pr2009-01-09.html
news article about the merger approval - http://tiny.pl/z8lf
full fcc timeline - http://www.fcc.gov/transaction/alltel-verizon.html
Verizon loses a net of 1.3M subscribers while AT&T nets 1.3M subs. Verizon isn't so far ahead of AT&T in that regard to want to lose 10% of the subscriber base of the Alltel buyout. Verizon still has more coverage than AT&T, but even that will be dwindling as AT&T builds out in Alltel's more rural areas with 3G. I don't think Verizon wanted to do it at all.
One should tease the Department of Justice even less than Google. For Verison it's not a challenge. It's cataclysm.
They're losing customers? Even with a badass phone like the storm!? </sarcasm>
I know you were be sarcastic (you even gave a sarcasm tag) but I know some on this forum will read my post out of context so i'll clarify...
Verizon and AT&T are both adding plenty of customers each quarter, mostly coming from Sprint and if not for the iPhone AT&T wouldn't be doing nearly as well. However, the Alltel deal puts about 1.4M customers from Verizon into AT&T's pocket while it gives about 120k customers to Verizon from AT&T. This is a net subscriber change of about 1.3M in for AT&T and away from Verizon.
I remember when switching from tmobile and looking for a new provider, everyone insisted I get Verizon. Where I live (Virginia) I have yet to find a place where my friends don't have great service with Verizon. I guess that will change? It seems to me that neither customer support or phone selection have been Verizon's key selling point. They'll just have to improve on those two things now I guess.
I dislike all cell company practices. I think the rising cost of an SMS is outrageous for 160 character max, especially when I pay $30 for unlimited data. I could go on, but I won't. However, Verizon's nickel and diming seems to be an extreme for a US carrier which I don't care for but they do have the best coverage overall, but I can't say that I'm in many places where AT&T isn't decent to exceptional. I've noticed 3G speed increases, 3G additions in small towns and cities where I know EDGE was the only option until recently, and have only had no service in one rural area once in my 2 years being back with AT&T/Cingular.
Of course, if you live in an area with poor AT&T coverage and good Verizon coverage it's pretty obvious that the iPhone isn't an ideal device. I would expect that NYC will be 850MHz by this summer with more bandwidth. I'm sure we'll find out this summer after the launch of the new iPhone.
Customer service-wise, the iPhone is tops as Apple has it's own US-based call center for tech support. I think this was one of the things Verizon wouldn't agree to.
Too bad NY and PA aren't on the list. When I visit rural parts of those states I'm always climbing hills looking for the barest flicker of Edge coverage. (Specifically: southwest NY and northeast PA.)
I was in some towns outside the Adirondack last month. The coverage was existant but I had slow* EDGE and GPRS. Though NYC was surprisingly solid 3G.
* Slow even for EDGE
How about they fix their reception in metro areas.
As we've been discussing, AT&T is moving to 850MHz.
BJ
Verizon and AT&T are both adding plenty of customers each quarter, mostly coming from Sprint and if not for the iPhone AT&T wouldn't be doing nearly as well. However, the Alltel deal puts about 1.4M customers from Verizon into AT&T's pocket while it gives about 120k customers to Verizon from AT&T. This is a net subscriber change of about 1.3M in for AT&T and away from Verizon.
Not really. You are looking at it as if this were an independent deal, when it's not. It's just a small part of the overall deal of Verizon buying Alltel. Verizon buys Alltel, but the Feds set the condition that they need to divest those regions were Verizon and Alltel were the only major players (because it would give Verizon a monopoly position in those regions with no competition). So Verizon sells a small part of their acquisition to AT&T, and a few other regional carriers.
So in the grand scheme of things, Verizon is getting about 90% of Alltel's customers and AT&T is getting about 10% of them. I wouldn't call that a net subscriber loss for Verizon because if they hadn't purchased Alltel and gained that 90%, they wouldn't be "losing" any subscribers to AT&T because of this sub-bullet to the Alltel acquisition.
Not really. You are looking at it as if this were an independent deal, when it's not. It's just a small part of the overall deal of Verizon buying Alltel. Verizon buys Alltel, but the Feds set the condition that they need to divest those regions were Verizon and Alltel were the only major players (because it would give Verizon a monopoly position in those regions with no competition). So Verizon sells a small part of their acquisition to AT&T, and a few other regional carriers.
So in the grand scheme of things, Verizon is getting about 90% of Alltel's customers and AT&T is getting about 10% of them. I wouldn't call that a net subscriber loss for Verizon because if they hadn't purchased Alltel and gained that 90%, they wouldn't be "losing" any subscribers to AT&T because of this sub-bullet to the Alltel acquisition.
You're correct and I mentioned that in a later posting.
Verizon isn't so far ahead of AT&T in that regard to want to lose 10% of the subscriber base of the Alltel buyout.
The numbers for Verizon's subscriber base already include the ~14.5M Alltel subs, so that is why I stated it that way.
PS: How many real additions did Verizon and AT&T each get last quarter?