In a move intended to strengthen both carriers, AT&T Wireless will buy SBC Communications Inc.'s Indianapolis wireless system for a reported $530 million in cash. The deal enables AT&T Wireless to fill a gap in its nationwide wireless coverage and lets SBC proceed with its buyout of Ameritech Corp. SBC must give up certain assets to gain federal approval of its buyout.
The announcement follows AT&T's acquisitions earlier this year ofwireless systems in the San Francisco Bay area, San Diego, and Houston, as well as the Wireless One Network in Florida. AT&T Wireless says the Indianapolis acquisition would add more than 113,000 subscribers initially, with access to a market of more than 3 million. In an ironic twist, company execs couldn't be reached for comment because of a communication system outage Monday.
Observers expect the acquisition to strengthen AT&T's nationwide wireless services by reducing costs and expanding service capabilities. "Where they don't own a network, it costs them to operate," says Jeff Kagan, an independent telecom-industry analyst. "The more of the network you own, the more ubiquitous your data offerings, and the more area you can deliver services to."
The transaction, which would result in about 100 employees joining AT&T Wireless, is expected to close before the end of the year, pending regulatory approval.