Nearly a year after announcing the deal, AT&T (NYSE:T) has received US Justice Department clearance to purchase Centennial Communications (NASDAQ:CYCL) in exchange for divesting eight markets in Louisiana and Mississippi, five of which Verizon Wireless (NYSE:VZ, NYSE:VOD) has already agreed to buy. The FCC still has to sign off on the $944 million deal, but AT&T said it expects to close the transaction this quarter, adding about 1 million subscribers to its rolls in the Midwest, Southeast, US Virgin Islands and Puerto Rico.
The acquisition has taken far longer than AT&T original anticipated, and last month in a presentation it filed with the FCCsaid that any further delay would “impose a severe burden on Centennial and its customers.” According to analyst firm Stifel Nicolaus, the FCC Wireless Communications Bureau is still evaluating the merger so no immediate decision is imminent.
“We continue to believe that the Commissioners will not be briefed on the case until after this work has concluded, but we are increasingly of the view that, unlike under the prior administration, there will be a significant amount of deference given to the Bureau determinations,” a Stifel research note issued today stated. ”Assuming that none of the Commissioners seek to use this merger as a vehicle for making broader policy runs, this would compress the review period before the Commissioners.”
Sprint (NYSE:S), while not challenging the deal itself, has made the rather unusual requestthat the FCC require AT&T to keep Centennial’s CDMA networks in Puerto Rico running for 18 months. While Centennial is a GSM operator on the mainland, its Puerto Rico networks are CDMA, which AT&T plans to convert to its technology of choice. Sprint, also a CDMA operator, has roaming agreements with Centennial and wants to keep those agreements in place until it finds a new roaming partner.