US telecoms giant AT&T has agreed to purchase regional wireless, broadband and fixed line operator Centennial Communications for USD944 million in cash. Centennial operates networks in Midwest and Southeast US states, Puerto Rico and the US Virgin Islands. It has around 1.1 million wireless subscribers, of which about 40% are in Puerto Rico, where it also has around 596,000 broadband, VoIP, data and fixed access lines, mostly serving business customers. In the US, AT&T says the acquisition will improve coverage and services for its customers via Centennial’s 850MHz wireless spectrum in states including Indiana, Louisiana, Michigan, Mississippi, Ohio and Texas. The deal awaits the approval from Centennial shareholders and US and Puerto Rican regulators, and is expected to be completed in the second quarter of 2009.
An issue that the Puerto Rican Telecommunications Regulatory Board and the US Federal Communications Commission will be looking at is the potential anti-competitive aspect of the deal. According to TeleGeography’s GlobalComms database, AT&T’s existing wireless business in Puerto Rico stood in second place with around 22% market share in subscriber terms at the end of June 2008, ahead of Centennial with around 17% of customers on the island. The planned acquisition would see AT&T leapfrog current mobile leader Claro Puerto Rico (owned by Mexico-based America Movil, with nearly a quarter of all subscribers at mid-2008) to become the dominant operator in the highly competitive market.