AT&T* announced today that it has agreed to sell its incumbent local exchange operations in Connecticut to Connecticut-based Frontier Communications for
$2.0 billion in cash. The transaction includes wireline network assets and consumer, business and wholesale customer relationships.
Frontier provides communications services to residential and business customers across 27 states today. With the transaction, Stamford-headquartered Frontier will now have operations to provide communications service to customers in the State of Connecticut.
AT&T remains committed to having a significant presence in Connecticut, with employees, operations and investment to provide wireless service on the nation’s fastest and most reliable 4G LTE network**, and networking, application solutions and professional services for Connecticut business customers.
“This is a good business decision for both companies, good for customers and good for Connecticut,” said Patricia Jacobs, President-AT&T New England. “We will continue to invest in Connecticut to serve our wireless and business customers, will maintain a significant employee presence here and will continue to be involved in the community. The fact that Frontier is headquartered in Connecticut will help ensure a smooth transition for customers and employees.”
The sales proceeds will, in part, be used to further AT&T’s plan to transform its operations — through Project VIP — to an all-IP, wireless and cloud network. With Project VIP, AT&T plans to expand its 4G LTE network to 300 million people across the U.S. and, in its remaining 21-state wireline service area, to expand U-verse high speed Internet and video services to more customer locations, and deploy its fiber network to more business customer locations.
About 2,700 wireline employees supporting AT&T’s operations in Connecticut will transfer with the business to Frontier at the close of the transaction. Frontier has agreed to honor the existing collective bargaining agreement for employees represented by the Communications Workers of America.
“Throughout this process, we’ll work closely with Frontier to ensure a smooth transition for our customers and employees,” Jacobs said. “And until we close the deal and transition customers to Frontier, we’ll continue to operate business as usual, delivering the great service our customers expect from us.”
Under the terms of the deal, AT&T will receive $2.0 billion in cash for the stock of its subsidiaries The Southern New England Telephone Company and SNET America, Inc. Customer relationships included in the transaction are:
- More than 900,000 voice connections, including U-verse Voice over IP and traditional voice services delivered over access lines.
- Approximately 415,000 broadband connections, including about 245,000 U-verse High Speed Internet and about 170,000 DSL customers.
- About 180,000 U-verse video subscribers.
The transaction is subject to review by the U.S. Department of Justice, the Federal Communications Commission and the Connecticut Public Utilities Regulatory Authority and other state regulatory authorities. AT&T expects the transaction to close in the second half of 2014. The divested operations represent about $1.2 billion in annual revenues, or less than 1 percent of AT&T’s total annual revenues, as of 2013. This transaction will not affect AT&T’s 2013 financial results, and after the deal closes, financial impacts will be reflected in guidance for future periods. AT&T is currently evaluating the impact of this sale on its Project VIP projections but does not expect significant changes.
*AT&T products and services are provided or offered by subsidiaries and affiliates of AT&T Inc. under the AT&T brand and not by AT&T Inc.
**Claims Basis: Speed - nt’l carriers’ avg 4G LTE download speeds; Reliability - data transfer completion rates on nationwide 4G LTE networks. LTE is a trademark of ETSI. 4G LTE not avail. everywhere.
AT&T Inc. (NYSE:T, news, filings) is a premier communications holding company and one of the most honored companies in the world. Its subsidiaries and affiliates – AT&T operating companies – are the providers of AT&T services in the United States and internationally. With a powerful array of network resources that includes the nation’s fastest and most reliable 4G LTE network, AT&T is a leading provider of wireless, Wi-Fi, high speed Internet, voice and cloud-based services. A leader in mobile Internet, AT&T also offers the best wireless coverage worldwide of any U.S. carrier, offering the most wireless phones that work in the most countries. It also offers advanced TV service with the AT&T U-verse® brand. The company’s suite of IP-based business communications services is one of the most advanced in the world.
Additional information about AT&T Inc. and the products and services provided by AT&T subsidiaries and affiliates is available at http://www.att.com/aboutus or follow our news on Twitter at @ATT, on Facebook at http://www.facebook.com/att and YouTube at http://www.youtube.com/att.
© 2013 AT&T Intellectual Property. All rights reserved. AT&T, the AT&T logo and all other marks contained herein are trademarks of AT&T Intellectual Property and/or AT&T affiliated companies. All other marks contained herein are the property of their respective owners.
4G LTE speed claim based on national carriers’ average 4G LTE download speeds. Reliability claim based on data transfer completion rates on nationwide 4G LTE networks. 4G LTE availability varies.
Cautionary Language Concerning Forward-Looking Statements
Information set forth in this press release contains financial estimates and other forward-looking statements that are subject to risks and uncertainties, and actual results might differ materially. A discussion of factors that may affect future results is contained in AT&T's filings with the Securities and Exchange Commission. AT&T disclaims any obligation to update and revise statements contained in this news release based on new information or otherwise.