AT&T Announces Plans to Sell Connecticut Wireline Operations to Frontier Communications for $2.0 Billion
Dallas, Texas, December 17, 2013
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.