AT&T (NYSE: T) continues to move out of the wireline business. The carrier today announced that it would sell its ILEC operations in Connecticut--including 900,000 voice customers, 415,000 broadband customers and 180,000 U-verse video subscribers--to Frontier (Nasdaq: FTR) for $2 billion.
In a news release, the incumbent carrier said the deal will give Frontier a presence in 27 states and move AT&T closer to becoming "an all-IP, wireless and cloud network."
AT&T is in the final stages of Project VIP, its $14 billion initiative to expand its 4G network to 300 million people. Concurrently, Project VIP funds are being used to upgrade wireline infrastructure to build out fiber and improve broadband connectivity in 21 states where AT&T remains active.
"This is a good business decision for both companies, good for customers and good for Connecticut," Patricia Jones, president of AT&T New England said in the news release. "We will continue to invest in Connecticut to serve our wireless and business customers, will maintain a significant employee presence here and will continue to be involved in the community. The fact that Frontier is headquartered in Connecticut will help ensure a smooth transition for customers and employees."
About 2,700 of those employees will transfer, along with their union contracts, to Frontier as part of the transaction, which is subject to review by the U.S. Department of Justice, the FCC and the Connecticut Public Regulatory Authority.
AT&T stock rose 0.6 percent to $34.37 in early trading and Frontier was up 12 percent to $4.96, according to Bloomberg.
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