AT&T Expands iPhone Sales Area, Buys Tiny Carrier Centennial

AT&T (T) goes shopping again: The telco bought N.J.-based Centennial Wireless yesterday for $944 million. Centennial has 1.1 million subscribers. Why buy a tiny carrier?

  • Rival Verizon (VZ) Wireless is in the process of making a big buy — Alltel, for $28 billion — leapfrogging AT&T as the nation’s no. 1 carrier. This will help inch those numbers back up.
  • It was pretty cheap — $860 per subscriber. In June, 2007, AT&T paid $1,650 per subscriber for Dobson Communications, in a $2.7 billion deal that included 1.7 million subscribers. Subscribers aren’t necessarily the biggest factor in price — location, spectrum, etc. matter, too — but they’re a decent benchmark.
  • More places to sell Apple’s (AAPL) iPhone!
  • AT&T fills holes in its network where its subscribers currently roam onto Centennial’s network — such as in the Midwest, Southeast, and Puerto Rico. This saves money — and can make money on roaming revenue in the long run.

See Also:
Cable Cos Winning Broadband War: Beating Telcos 2-to-1 For New Subs
Coming Soon: Use Your iPhone As A 3G Laptop Modem
AT&T Buys Wayport, Adds 10,000 Wi-Fi Hotspots

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