AT&T Completes Acquisition of Centennial Communications

AT&T announced that it has completed its acquisition of
Centennial Communications Corp.  The acquisition enhances
AT&T’s network coverage across the Midwest and Southeast United
States and in Puerto Rico and the U.S. Virgin Islands.

The
combination of the two companies’ wireless networks will allow AT&T
to deliver broader wireless coverage, including to approximately
893,000 former Centennial wireless subscribers.1
With the addition of Centennial, AT&T also expands its wired
network coverage to Puerto Rico, enhancing service for its business
customers with operations there.

“The
addition of Centennial will enhance AT&T’s assets in wireless — a
strategic priority and one of our biggest growth drivers — and service
for customers of both companies,” said Ralph de la Vega, president and
chief executive officer of AT&T Mobility and Consumer Markets.
“We’re excited to give Centennial wireless subscribers access to the
nation’s fastest 3G network plus our premier lineup of smartphones and
unmatched portfolio of applications and services.

“We’ll
also improve network reliability for our wireless subscribers who will
be able to make on-network calls in the Centennial footprint,” said de
la Vega. “And as Centennial’s broadband network in Puerto Rico is
integrated with AT&T’s extensive global network and advanced
service offerings, we’ll offer corporations that operate in Puerto Rico
the benefits of end-to-end service over a single network.”

Integration Plans
AT&T plans to integrate Centennial’s networks and products with
AT&T’s networks and product portfolio. The transaction extends
AT&T’s wireless network coverage in primarily rural areas of
Indiana, Louisiana, Michigan, Ohio and Texas as well as enhances
coverage in Puerto Rico and the U.S. Virgin Islands.

In
the mainland U.S., AT&T will move quickly to rebrand Centennial as
AT&T and to make AT&T’s innovative products and services
available to Centennial’s customers.2
By late January 2010, AT&T products and services will be available
at more than 100 Centennial retail locations. Within the same
timeframe, AT&T signage will be installed in all Centennial
locations. Former Centennial wireless subscribers may keep their
existing rate plans, but they will also have the opportunity to migrate
to AT&T rate plans without activation or upgrade fees. Existing
AT&T customer contracts will not change.

In
Puerto Rico, the Centennial brand will continue through mid-2010.
AT&T will honor the current rate plans and contracts of Centennial
wireless subscribers. AT&T expects to make the full portfolio of
AT&T products and services available in Centennial locations in
Puerto Rico in the third quarter of 2010. At that point, Centennial
customers will have the opportunity to migrate to AT&T rate plans
without activation or upgrade fees. Existing AT&T customer
contracts in Puerto Rico will not change.

To
provide the best experience possible for Centennial customers who
choose to migrate to AT&T service, prior to the transition,
AT&T plans to deploy 3G at more than 200 sites in Centennial’s
markets. This deployment plan includes adding 3G capabilities at more
than 100 sites and expanding 3G coverage and capacity at approximately
100 sites.

Centennial
customers who choose AT&T plans will enjoy significant benefits as
they join the AT&T network. AT&T offers the best wireless
coverage worldwide, with more phones working in more places; more
applications running over its network; and access to the nation’s
fastest 3G network, which will get even faster as AT&T rolls out
HSPA 7.2 technology in advance of its deployment of 4G LTE service. And
unlike other wireless networks, AT&T’s network enables subscribers
to talk and e-mail or surf the Web at the same time — one of the
reasons, along with the industry’s leading lineup of devices, that
significantly more smartphone users have chosen AT&T over other
wireless carriers. Centennial customers who choose select smartphones
and LaptopConnect cards will have access to AT&T’s Wi-Fi hot spot
network, the largest in the U.S. with more than 20,000 hot spots, at no
additional charge. AT&T will also offer Centennial subscribers
Rollover® Minutes, a feature exclusive to AT&T, as well as a mobile-to-mobile calling community of nearly 82 million3 members.

Centennial’s
wired network assets in Puerto Rico will also allow AT&T to better
serve business customers with a presence in Puerto Rico.AT&T will
continue to provide switched voice, high-capacity data and Internet
Protocol solutions for business customers in Puerto Rico. Existing
Centennial customers will now have access to new technologies, to
AT&T’s innovative products and to both wireline and wireless
services from AT&T.

Merger Synergies and Financials
The acquisition of Centennial will provide AT&T opportunities for
synergies in areas such as corporate functions, advertising, customer
care and network operations. AT&T expects upfront integration costs
will result in minimal dilution to EPS and cash flow in 2009. As
previously announced, Centennial stockholders will receive $8.50 per
share in cash. Including net debt, the transaction is valued at $2.7
billion. AT&T will take prompt actions to redeem all of
Centennial’s outstanding debt under its indentures and credit agreement.

Regulatory Approval Process
AT&T’s acquisition of Centennial has been reviewed and approved by
the Federal Communications Commission (FCC). Pursuant to a consent
decree, the U.S. Department of Justice (DOJ) and the Attorney General
of the State of Louisiana have agreed to permit the merger to close.

As
a result of the FCC and DOJ review processes, AT&T agreed to divest
operations in eight service areas: Alexandria, La., Lafayette, La.,
LA-3 (DeSoto), LA-5 (Beauregard), LA-6 (Iberville), LA-7 (West
Feliciana), MS-8 (Claiborne) and MS-9 (Copiah). Per the terms of a
definitive agreement signed in May 2009, AT&T has agreed to divest
to Verizon Wireless five of the Centennial service areas covered under
the DOJ ruling. These five service areas are Lafayette, La., LA-5
(Beauregard), LA-6 (Iberville), LA-7 (West Feliciana) and MS-8
(Claiborne). AT&T now expects that this transaction will close in
the first quarter of 2010, once the companies obtain regulatory
approvals. AT&T also has a definitive agreement with Verizon
Wireless to acquire wireless properties Verizon Wireless is divesting
as a result of its acquisition of Alltel. That transaction is also
subject to regulatory approvals and is expected to close in the fourth
quarter of 2009.

To secure
FCC approval of the transaction, AT&T committed to honor agreements
for roaming on Centennial’s network. AT&T will honor existing
roaming agreements with other carriers for the life of the contract 
or, for carriers with fewer than 10 million subscribers, will maintain
the roaming agreement for at least four years or the full term of the
agreement with Centennial, whichever is longer. AT&T also agreed to
certain measures restricting the flow of competitive information
between AT&T and América Móvil. AT&T is a minority shareholder
in América Móvil, which also provides telecommunications services in
Puerto Rico.

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