AT&T Wireless Services Inc. and Triton PCS formed a joint venture agreement that will expand AT&T’s digital coverage in Virginia, North Carolina, South Carolina, the Washington-Baltimore corridor and Georgia.
The agreement calls for Triton to obtain financing and build out a Time Division Multiple Access network using 20 megahertz of personal communications services spectrum held by AT&T. The markets included in the joint venture cover nearly 11 million people.
AT&T said it will retain 10 megahertz in each market for future services.
Triton will operate the network under the Triton name with a tag line indicating the network is part of the AT&T brand. Mike Kalogris, chairman and chief executive officer of Triton, said he expects the Triton name eventually to be phased out in favor of a more consumer-friendly brand name.
AT&T said the companies will enter several operating agreements and reciprocal roaming agreements that will allow customers to use their service throughout AT&T’s national coverage area.
Kalogris said Triton already has the necessary cash equity and bank debt to fund the network buildout. It also has chosen L.M. Ericsson to supply the infrastructure equipment. Buildout should begin within the next few months, following regulatory approvals.
According to Kalogris, high-traffic areas and key corridors will be the initial focus and could be ready for launch within a few months. About 40 percent of the area should be ready to launch in about 18 months, said Kalogris.
AT&T and Triton agree the arrangement is a tool to build the AT&T digital network more quickly.
“I think what they quickly realized is if they can harness the experienced entrepreneurial teams, they get two pluses. One, they get it done more quickly and two, secondary markets like Richmond, Va., or Charleston, S.C., require a more entrepreneurial management, and that’s what we’re particularly good at,” Kalogris said.
Bill Hague, vice president of acquisitions for AT&T, said, “We’ve invested with a high-quality firm that has a track record for not only building a quality network in their past life, but also the management team is very talented and known for their financial performance too.”
Triton had examined similar branding deals with other carriers, but Kalogris said the company selected AT&T because it demanded quality and speed without getting involved in control or financing.
Triton was formed last year by key management of Horizon Cellular Group along with J.P. Morgan Capital and Chase Capital Partners. Kalogris said Horizon and Triton share a similar strategy.
Horizon, which was held 10 percent by McCaw Cellular Communications Inc., had networks in areas adjacent to that of McCaw’s markets. Both companies traded under the Cellular One name, and Kalogris said it was a successful strategic relationship because the companies were able to expand the footprint more quickly. The Triton-AT&T arrangement is a spin-off of that idea, added Kalogris.
“We will go out and stay laser-focused on those [cities] while they (AT&T) continue their buildout in the bigger cities,” said Kalogris.
AT&T holds a noncontrolling, minority share in Triton’s common stock and one of seven board seats.
