What’s Behind AT&T’s Plans for Alltel Assets?

Now that AT&T’s purchase of wireless assets that formerly belonged to Alltel has closed, AT&T plans to convert that network – which currently uses Code division multiplex access (CDMA) – to Evolved High-Speed Packet Access (HSPA+) and long-term evolution (LTE). The assets, which include rural areas of six states, were in the hands of Atlantic Tele-Network.

According to the Federal Communications Commission’s conditional order approving AT&T’s purchase, AT&T estimates that 100% of the population covered in the former Alltel markets will have access to AT&T HSPA+ services within 15 months and that 75% will have access to LTE services within 18 months. An additional 10% will have access to LTE within 36 months, according to the order. These plans would appear to fit quite nicely into AT&T’s plans for modernizing rural markets where the company is the incumbent local telephone service provider, calling for the expansion of LTE so that it covers 300 million people by year-end 2014, including unserved areas that cannot get broadband service and where the carrier is not planning to deploy high-speed DSL. Five of the six states included in AT&T’s purchase from ATNI/Alltel are states in which AT&T operates as an incumbent local exchange carrier (ILEC) including Georgia, Illinois, North Carolina, Ohio and South Carolina, as well as one non-ILEC state, Idaho. AT&T made the commitment to upgrade its rural areas after determining it would not be feasible to sell those territories. The upgrade could be critical to the carrier retaining business in its rural areas as the FCC moves along with its Connect America Fund program. AT&T apparently is hoping that if it can bring LTE to its ILEC markets that lack landline broadband, the FCC will consider those markets to have broadband. AT&T this year accepted some Connect America funding in exchange for committing to bring broadband to some of its landline customers that cannot currently get broadband.