Alaska Communications and GCI agreed to pool their resources into a company to jointly manage their two networks in a bid to cover more of Alaska and guard against incursions from Tier 1 carriers.
The new firm, called Alaska Wireless Network (AWN), will be a Delaware limited liability company that will hold and operate both companies' wireless facilities. AWN will design and operate a statewide wireless network to deliver wireless service to GCI and Alaska Communications subscribers. GCI and Alaska Communications will continue to market and sell services independently to their respective retail customers.
GCI and Alaska Communications each will contribute to AWN their respective wireless assets, including spectrum licenses, cell sites and backhaul facilities, switching systems and other assets necessary to operate a statewide wireless network. As part of the deal, GCI will purchase $100 million of wireless assets from Alaska Communications and contribute them to AWN.
The companies said that AWN will cover more than 95 percent of Alaska's population of around 710,000. Initially, AWN will serve the more than 250,000 GCI and Alaska Communications urban and rural subscribers and lifeline subscribers. GCI operates a GSM network and Alaska Communications operates a CDMA network. Alaska Communications said last year it was planning to deploy LTE, but those plans have been put on hold.
Alaska Communications will own one-third and GCI will own two-thirds of AWN. Wilson Hughes, GCI's current COO, has agreed to serve as AWN's first president and CEO. The deal is expected to close in the second quarter of 2013.
Network sharing is more common in Europe. In the United States, wireless carriers have been loathe to share network resources. However, that attitude may be changing: In late March, Leap Wireless (NASDAQ:LEAP) CEO Doug Hutcheson proposed that operators look closely at network sharing as a possible solution to spectrum shortfalls.
For more:
- see this release
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