AT&T must explain how it plans to transition prepaid customers to its network for deal to move forward
As it nears the (informal) 180 day timeline for approving AT&T's purchase of Alltel, the FCC has put a pause on the review in order to get more information about how AT&T plans to transition all of Alltel's customers to its network. If you'll recall back to January, AT&T purchased spectrum assets and 585,000 customers when it acquired the rest of Alltel for $780 million. At the time it seemed like a slam dunk purchase for AT&T, but now the FCC is worried that AT&T doesn't have an appropriate plan for Alltel's over 180,000 prepaid customers.
AT&T has offered an acceptable plan to bring Alltel's postpaid customers over to its network, but the FCC sees the prepaid customers as an important segment of the customer base that shouldn't be left disenfranchised when the deal completes. Jim Cicconi, Senior Executive Vice President of External & Legislative Affairs at AT&T, had this to say:
“AT&T is extremely disappointed at the FCC delay today on this small transaction. AT&T is ready, willing and able to make significant network investments in these rural territories to bring HSPA+ and LTE services to Allied’s customers, an investment that will not occur but for this transaction. AT&T has actively worked to address FCC concerns and will continue to work with the Commission until all issues are resolved.”
We have no doubt that AT&T will do whatever it needs to in order to get these spectrum holdings into its hands once and for all. But after seeing Verizon be forced to divest some of its holdings when it acquired most of Alltel previously, the process may not be as easy as it expected.