OKLAHOMA CITY-Dobson Communications Corp., the primary licensee of the Cellular One brand, said it plans to purchase the brand from Alltel Corp. for $1.3 million. Alltel acquired the Cellular One brand when it purchased Western Wireless Corp. in August.
Raymond James & Associates analyst Ric Prentiss noted that the sale is no surprise and will be good for Dobson, a rural provider with markets in 16 states. Alltel expects the brand purchase to close before the end of the year.
As the primary licensee, “We were the logical buyer. It was just a matter of working out an acceptable agreement,” said Warren Henry, vice president of investor relations for Dobson. He added that the company will follow through on its obligations to other current licensees of the Cellular One brand name.
“We see it as one of many assets that we have and something that we’ll continue to develop as the owner now,” Henry said.
Alltel also has agreed to sell a rural service area market in southwest Arkansas covering 100,000 potential customers to Cingular Wireless L.L.C., pending federal regulatory approval. Between the two deals, Alltel said it will have completed the divesting requirements of its $6 billion purchase of Western Wireless.
Alltel has been aggressively expanding its services in rural markets. In 2002, the company acquired CenturyTel Inc.’s wireless assets, then went on to gobble up Western Wireless earlier this year. Last month, Alltel announced its purchase of Midwest Wireless for $1 billion, with 400,000 customers, network assets and licenses in Minnesota, Iowa and Wisconsin.
The RSA sale to Cingular, for which terms were not disclosed, is expected to close in the first quarter of 2006. Alltel will maintain ownership of the wireless property in the RSA that it operated prior to its merger with Western Wireless.
