The two leading wireless providers in Alaska, General Communication (GCI) and Alaska Communications, have announced the completion of their previously announced transaction to form The Alaska Wireless Network (AWN).
The two providers have each contributed their respective wireless assets, including spectrum licenses, cell sites, backhaul facility usage rights and other assets necessary for AWN to design, build and operate a statewide wireless network.
GCI, the largest telco in the state with 2012 revenues of $710.2 million, will own two-thirds and will consolidate AWN as a GCI subsidiary, and Alaska Communications, with 2012 revenues of $367.8 million, will own one-third of AWN.
Under the terms of the agreement, Alaska Communications will receive $100 million cash and is eligible to receive preferred distributions totalling up to $190 million over the first four years of operation. GCI will receive all remaining available distributions over the first four years with distributions thereafter being on a pro rata ownership basis.
From the start, AWN's network will cover more of Alaska's population than the network of any other wireless provider and will provide wireless services, including LTE, to its owners.
Alaska Communications and GCI will then independently sell these services to their respective retail customers and continue to operate as competitors in the state.
In a joint statement, Alaska Communications President and CEO Anand Vadapalli and GCI President and CEO Ron Duncan, said:
"The wireless business is capital intensive, requires scale to compete successfully against national carriers, and demands more spectrum than either of our two companies individually owns".
"We believe that The Alaska Wireless Network will provide the fastest, most geographically extensive, and most reasonably priced wireless services for Alaska subscribers, allowing us each to compete more effectively in the retail market".