More Moves on AT&T and Sprint Affiliates Likely

 
 
By eweek  |  Posted 2001-10-09
 
 
 

AT&T Wireless bought affiliate TeleCorp PCS in what may be the first of other similar acquisitions by AT&T Wireless. Sprint PCS, which also has an affiliate program, may not start scooping up its partners anytime soon.

AT&T Wireless on Monday said it would acquire the remaining 77 percent of TeleCorp PCS that it didnt already own in an all stock transaction valued at $4.7 billion. As part of the acquisition, AT&T Wireless will gain more than 900,000 customers and coverage that includes 16 of the Top 100 markets.

Industry analysts have long predicted that AT&T Wireless would buy its affiliates, and the timing was right for this move. "TeleCorp was ready to need more funding for its next round of upgrades," said Sharon Armbrust, senior analyst with Paul Kagan Associates. The price, she added, was right, too.

The TeleCorp markets will get next-generation services like the rest of AT&T Wireless properties. "TeleCorp customers will enjoy the benefits of these exciting new advanced services sooner than anticipated and under the AT&T Wireless brand," said John Zeglis, chairman and CEO of AT&T Wireless.

Triton PCS and Tritel are two AT&T Wireless affiliates that together with TeleCorp built the SunCom brand name in the South. AT&T Wireless has emphasized repeatedly that Triton doesnt fit its acquisition criteria, but that could be a negotiation ploy, Armbrust said. Triton could be an expensive proposition, so AT&T may be posturing to make a better deal. But, Tritons coverage area would make it a good buy, Armbrust said, and it has a higher operating performance then TeleCorp.

Sprint PCS also has operator partners, but it may be some time before it begins buying up its affiliates. "I expect to see more a la the interaffiliate consolidation," said Armbrust. Alamosa PCS, a Sprint PCS partner, has already acquired three operators this year, making it the largest Sprint PCS partner.

Many of Sprint PCS partners have yet to develop their networks as much as the AT&T Wireless affiliates. "Theres still a lot of opportunity to aggregate each other and look that much more attractive to Sprint," said Armbrust. Ultimately, she expects that AT&T Wireless and Sprint PCS will purchase all of their affiliates.

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