Alaska Wireless Network Joint Venture Moves Forward

Alaska Communications and General Communication (NASDAQ: GNCMA  ) -- also known as GCI -- have finalized the transaction they proposed last summer to form The Alaska Wireless Network, or AWN, both companies announced today.

The telecoms have contributed their respective spectrum licenses, cell sites, backhaul facility usage rights, and the other wireless assets needed to produce and operate a wireless network that they say will be able to serve more of Alaska's population than any other mobile operator's networks can cover. Alaska Communications will own one-third of AWN and GCI will own the rest.

"The wireless business is capital intensive, requires scale to compete successfully against national carriers, and demands more spectrum than either of our two companies individually owns," said the CEO of Alaska Communications, Anand Vadapalli, and the CEO of GCI, Ron Duncan, in their joint statement. "By combining our respective wireless assets, we can provide a state-of-the-art Alaska wireless network owned and operated by Alaskans for Alaskans." That's the same statement they released last June in announcing the venture.

Alaska Communications will get $100 million in cash and be eligible to receive preferred distributions totaling up to $190 million over AWN's first four years. GCI will receive any remaining distributions after that for the same period. Profits thereafter will be distributed on a pro-rata basis.

Though the two companies will both use the AWN, they will each sell that network's services to their own retail customers and continue to compete as rivals in the Alaskan wireless market.

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