Alaskan wireline carriers Alaska Communications (Nasdaq: ALSK) and General Communications Inc. (Nasdaq: GNCMA) apparently see strength in numbers--especially when it comes to competing with wireless behemoths AT&T (NYSE: T) and Verizon Wireless (NYSE: VZ).
The Anchorage-based carriers have forged a joint wireless business in which GCI will buy $100 million of assets from Alaska Communications, fold the holdings into the venture and fund the deal with existing senior credit. GCI will then hold two-thirds of the equity. Alaska Communications will use the other third to reduce debt and increase cash holdings. The companies will manage the retail part of their business independently.
Alaska Communications has been especially jittery about Verizon's move into its marketplace so the deal is expected to help the carrier with concerns about potential "lower roaming revenue, increased pricing pressure, and subscriber losses," Standard & Poor analyst Ketul Gonda said in news reports.
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