Verizon Wireless To Acquire Rural Cellular For $2.67 Billion
The transaction illustrates the latest trend of major mobile phone service providers trying to grow their subscriber rolls.
Verizon Wireless said it will acquire Rural Cellular Corp. for about $2.67 billion in the latest example of the new attractiveness of rural wireless services.
Announced Monday, Verizon Wireless said the acquisition will increase its customer base by more than 700,000. Rural Cellular's networks range across areas in Maine, Vermont, New Hampshire, New York, Massachusetts, Alabama, Mississippi, Minnesota, North Dakota, South Dakota, Wisconsin, Kansas, Idaho, Washington, and Oregon.
While the thought of acquiring small rural wireless providers would have been shunned not too long ago, the transactions are becoming a way for major mobile phone service providers to grow their subscriber rolls. The Rural Cellular acquisition announcement follows by less than a month the acquisition of rural wireless provider Dobson Communications by AT&T for $2.8 billion. Dobson serves 1.7 million subscribers.
Verizon Wireless said it plans to move GSM customers in the Rural Cellular deployment area to its CDMA service, although Verizon said it anticipates keeping Rural Cellular's existing GSM networks to serve roaming needs of other GSM carriers' customers. Rural Cellular currently uses both CDMA and GSM technologies across its five Unicel regional markets.
Richard Ekstrand, president and CEO of Rural Cellular, noted that tourism, agriculture, and small business have been strong business segments in the company's territories.
"The addition of Rural Cellular's markets will enable us to expand our services into areas where previously we had little or no presence," said Lowell McAdam, president and CEO of Verizon Wireless, in a statement.
Shares of Rural Cellular rose $10.74 or almost 34% to $42.58 after the news.
2014 Next-Gen WAN SurveyWhile 68% say demand for WAN bandwidth will increase, just 15% are in the process of bringing new services or more capacity online now. For 26%, cost is the problem. Enter vendors from Aryaka to Cisco to Pertino, all looking to use cloud to transform how IT delivers wide-area connectivity.
The UC Infrastructure TrapWorries about subpar networks tanking unified communications programs could be valid: Thirty-one percent of respondents have rolled capabilities out to less than 10% of users vs. 21% delivering UC to 76% or more. Is low uptake a result of strained infrastructures delivering poor performance?