OKLAHOMA CITY-Dobson Communications Corp. signed a non-binding letter of intent with AT&T Wireless Services Inc. to exchange its two remaining wireless properties in California for two of AT&T Wireless’ properties in Alaska. All of the properties are currently launched TDMA networks.
The deal calls for AT&T Wireless to transfer its Anchorage, Alaska, Metropolitan Service Area covering approximately 262,100 potential customers and Alaska Rural Service Area No. 2 market covering approximately 168,300 pops to Dobson in exchange for Dobson’s ownership interest in the Santa Cruz, Calif., MSA covering approximately 255,600 pops and California RSA No. 4 covering approximately 386,900 pops.
Dobson said the move will provide it with a more concentrated network in Alaska that has little competition and remove it from a highly competitive California market.
“This would further rationalize and concentrate our operations and is consistent with the focus on improving the profitability of our local service business,” said Everett Dobson, chairman and chief executive officer of Dobson Communications. “Our limited licensed footprint in California increases the challenge of offering competitive local plans that generate profits in line with our operating goals. After this exchange, our networks in Alaska would cover the three largest cities and their adjacent markets, which combined are home to more than 95 percent of the state’s population.”
Analysts said the deal also provides AT&T Wireless with additional spectrum in California to build out its GSM/GPRS network without having to scavenge precious spectrum from its current TDMA voice network.
In connection with the spectrum swap, AT&T Wireless will also transfer all of its Dobson Series AA preferred stock to Dobson, reducing its interest in the rural operator from its current 12 percent to less than 5 percent. Dobson said it will cancel Series AA preferred stock after the transfer.
