The deal gives AT&T nearly one million new subscribers and enhances its wireless assets.
After nearly a full year of review, AT&T said Friday it has completed its acquisition of Centennial Communications.
The deal was originally thought to add about 1.1 million subscribers, but after divestitures, AT&T will gain about 893,000 new wireless customers for a total of more than 80 million subscribers, but it still trails Verizon Wireless. Along with the $945 million purchase price, AT&T will be taking on Centennial's debt, which pushes the total value of the transaction to about $2.7 billion, AT&T said.
The acquisition expands AT&T's wireless footprint, particularly in the Midwestern and Southeastern United States, as well as in the U.S. Virgin Islands and Puerto Rico. The holdings in Puerto Rico may have been a reason the review process was lengthy. Sprint Nextel expressed concern to the Federal Communications Commission over its ability to connect calls in that region after the AT&T-Centennial merger.
AT&T said it will rebrand Centennial stores and services as quickly as possible, and by late January 2010, its products and services will be available at more than 100 Centennial retail locations. Centennial wireless customers will be able to keep their existing service plans but they will be able to migrate to AT&T plans without upgrade or activation fees.
It is becoming increasingly difficult for U.S. carriers to see organic subscriber growth due to the saturation of the market. Along with poaching away rivals' subscribers, carriers are looking to acquisitions for continued growth. With its six million subscribers, U.S. Cellular may be the next rural carrier to be acquired by one of the major players. The sixth-largest U.S. carrier is reportedly under pressure to sell, and its CDMA infrastructure makes it an attractive target for Sprint and Verizon.
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