The Federal Communications Commission granted final approval Thursday to the sale of Centennial Communications Corp. to AT&T, enabling the telecommunications giant to expand its coverage across the Midwest and Southeast, Puerto Rico and the U.S. Virgin Islands.
The sale recently was announced on the FCC’s website, as well as several other national business news outlets. Centennial provides cell phone, fixed line and broadband service to about 660,000 customers in the U.S. and about 440,000 customers in Puerto Rico and the U.S. Virgin Islands, according to the FCC website.
Under terms of the agreement, AT&T would acquire 100 percent of Centennial’s stock at $8.50 per share, for a total equity price of $944 million. Including net debt, the total enterprise value is approximately $2.8 billion. The acquisition was subject to U.S. Justice Department and FCC approval.
The Justice Department approved the sale in mid-October, but said AT&T would have to let go of eight Centennial service areas in Louisiana and Mississippi — five of which will be sold to Verizon Wireless. The FCC factored that in as condition of its recent approval, along with various other commitments, including AT&T’s pledge to maintain Centennial’s CDMA2000 wireless network in Puerto Rico and the territory for 18 months before switching over to its own platform.
On the mainland, AT&T will work to rebrand Centennial by late January 2010, making its products and services available to Centennial customers at more than 100 retail locations, according to a recent AT&T release. Former Centennial wireless subscribers will be able to keep their existing plans, but will also be able to switch over to AT&T without any activation or upgrade fees.
Meanwhile, the Centennial brand will be maintained in Puerto Rico and the USVI until mid-2010, the release said. The FCC has also required AT&T to maintain Centennial’s current network roaming agreements for four years under certain conditions, according to national news reports.
Before the switch, AT&T plans to roll out its 3G wireless network at more than 200 Centennial sites. The plan includes adding 3G capabilities at more than 100 sites and expanding 3G coverage and capacity at approximately 100 sites, according to AT&T’s release.
"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,” Ralph de la Vega, president and chief executive officer of AT&T Mobility and Consumer Markets, said in a statement Friday. “We’ll also improve network reliability for our wireless subscribers who will be able to make on-network calls in the Centennial footprint."
During a Public Services Commission meeting in February, Centennial representatives said the move would give its local customers access to a network with the "best" worldwide coverage, a broader range of wireless devises and what they called the "nation’s largest" Wi-Fi network, among other things.
"What’s most critical to the U.S. Virgin Islands is that we will be better prepared to respond to natural disasters," Jorge Bauermeister, Centennial’s attorney, said during the February meeting.
