Verizon Wireless’ $2.67 billion purchase of Rural Cellular Corporation, announced this morning, proves that telco consolidation remains alive and well. Big carriers continue to snap up smaller wireless companies for their subscribers — Rural Cellular has 716,000 customers — and roaming revenue. In June, AT&T paid $2.8 billion for Dobson Communications, which had 1.7 million subs.
Is Wall, N.J.-based Centennial Communications next on the block? At the end of February, Centennial had about 1 million subs in six states and Puerto Rico. In that period, the carrier lost $1.3 million on $229.1 million of revenue. Its customers spent about $66 per month on service, about $16 more than AT&T and Verizon pull monthly, but its churn, which measures the percentage of customers who leave the company every month, was a bit high at 2.4%.
Centennial mostly operates using the GSM network technology, meaning it would best fit with AT&T or T-Mobile’s networks, but don’t necessarily count out CDMA bidders like Verizon, Sprint or Alltel. Investors certainly seem to think someone is going to buy it: Since the company’s 52-week low last fall, the stock has more than doubled, giving it a $1.1 billion market cap.
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