AT&T To Sell Local Exchange Operations In Connecticut To Frontier

(RTTNews) - AT&T Inc. (T) announced it has agreed to sell its incumbent local exchange operations in Connecticut to Frontier Communications (FTR). AT&T will receive $2.0 billion in cash for the stock of its subsidiaries The Southern New England Telephone Company and SNET America Inc. The transaction includes wireline network assets and consumer, business and wholesale customer relationships. About 2,700 wireline employees supporting AT&T's operations in Connecticut will transfer to Frontier.

The deal is estimated to be accretive to Frontier's adjusted free cash flow per share in the first year. The transaction is estimated to improve Frontier's dividend payout ratio by more than 5 percentage points in the first year.

Customer relationships included in the transaction are: More than 900,000 voice connections, including U-verse Voice over IP and traditional voice services delivered over access lines; approximately 415,000 broadband connections, including about 245,000 U-verse High Speed Internet; about 170,000 DSL customers; and about 180,000 U-verse video subscribers.

AT&T Inc. said it does not expect the transaction will affect its 2013 financial results, and after the deal closes, financial impacts will be reflected in guidance for future periods. The divested operations represent about $1.2 billion in annual revenues.

Frontier provides communications services to residential and business customers across 27 states. With the transaction, Frontier will now have operations to provide communications service to customers in the State of Connecticut.