Alaska Communications discontinues wireless service

Clarion file photo

Alaska Communications on Thursday announced a deal to sell its wireless assets to another Alaska-based company, General Communications, Inc (GCI), for $300 million dollars. GCI will receive Alaska Communications’ base of approximately 109,000 wireless customers and its 33 percent ownership of the Alaska Wireless Network, LLC.

ACS wireless customers do not presently need to take action, and will not see immediate changes, according to an ACS media release. The deal includes a transition plan meant to provide wireless users with uninterrupted service during the transfer.

The release stated that among the costs incurred by the transaction will be “the wind down costs of (ACS)’s retail stores.” Heather Cavanaugh, ACS Director of Corporate Communications, spoke about plans for the ACS retail store in Kenai and the warehouse in Soldotna.

“Those stores will remain open for the next several months as we first have to close the deal, and then we’ll start to transition,” said Cavanaugh. The deal, according to the release, is expected to close in the first quarter of 2015. “For at least the next 3 months the store will remain open, and at that time we’ll decide if we want to keep the store for other purposes or close it,” Cavanaugh said. She estimated that between 150 and 200 jobs at local ACS facilities would be affected.

Cavanaugh said that the contracts of ACS wireless users will be honored until the end of their terms, and that although the deal will not give customers any special options for leaving their contracts before expiration, they will still be able to leave under the normal terms of the contract. The ACS wireless contract calls for an early termination fee of up to $480.

ACS and GCI partnered to create the Alaska Wireless Network in July of 2013. The two companies created the network to better compete against national wireless carriers, according to the release. GCI retained a two-thirds ownership of the network, and after the deal will own it completely.

According to the release, ACS will use the proceeds to reduce its $415 million debt by $250 million, and will focus on its broadband networks and information technology business, which include statewide voice and data networks and an undersea fiber optic system connecting Alaska to the contiguous United States.

 

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