Frontier to acquire AT&T Connecticut operations
The second largest operator in the US, AT&T, has announced the sale of its local exchange operations in Connecticut to regional operator Frontier Communications for $2 billion in cash.
The sales proceeds will reportedly go towards AT&T’s plans to expand its 4G LTE network.
Connecticut-based Frontier will take control of approximately 415,000 broadband connections, 900,000 voice and 180,000 video residential connections.
Frontier said the deal will improve its cash flow, and analysts have reported that the addition of AT&T customers will further boost Frontier's valuation.
Frontier has had to look to acquisitions for growth as consumers are disconnecting fixed-line connections in favour of wireless services.
AT&T, which depends on wireless for growth, has said it is looking to sell non-strategic wireline assets.
“This is a good business decision for both companies, good for customers and good for Connecticut,” said Patricia Jacobs, president of AT&T New England. “The fact that Frontier is headquartered in Connecticut will help ensure a smooth transition for customers and employees.”
The deal, expected to close in the second half of 2014, is subject to review by federal and state regulators.
The Frontier deal could complement AT&T’s ambitions to expand into Europe.