After a failed merger with T-Mobile, AT&T on Tuesday announced that it reached an all-cash agreement to buy Alltel, an Arkansas telecom services provider to rural areas, for $780 million.

The telecom giant’s mobile headquarters, AT&T Mobility, is based in Atlanta.

Through the deal with Alltel’s parent, Atlantic Tele-Network Inc., AT&T is buying the licenses, retail stores and network assets, along with about 585,000 subscribers, from Atlantic Tele-Network. The deal was likely secured to give AT&T new customers in rural areas of six states, but the Dallas-based company’s home state of Texas.

Alltel’s network covers about 4.6 million people in mainly rural areas across six states – Georgia, Idaho, Illinois, North Carolina, Ohio and South Carolina. It generated revenue of about $350 million for the first nine months of 2012.

The Alltel business had $350 million in revenue in the first nine months of 2012, generating operating income of about $34 million.

AT&T said it expects that as it upgrades the network, mobile Internet service will improve for both Alltel customers and AT&T customers who roam in those areas.
The deal remains subject to approval by the Federal Communications Commission and Department of Justice. The companies said they expect the deal to close in the second half of the year.

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