Frontier Communications Corporation (FTR) announced the disposition of its one-third stake in regional telecom carrier – Mohave Wireless – to Verizon Wireless. However, none of the companies disclosed the financial terms of the deal.
Over the years, Frontier Communications acted as the Ggeneral Ppartner for Mohave Wireless that extended high-quality cell coverage and service across northwest Arizona. Covering nearly 203,000 people, Mohave Wireless’ cellular spectrum license and operations span across Grand Canyon, Kingman, Lake Havasu City and Bullhead City.
Verizon Wireless – a joint venture between Verizon Communications Inc. (VZ) and Vodafone Group Plc. (VOD) – plans to absorb Mohave's CDMA EV-DO 3G network, with the target of rolling out 4G Long Term Evolution (:LTE) services in the region in the coming months.
For the time being, Verizon Wireless will serve the existing customers of Mohave under the old brand name. The subscribers will be migrated to Verizon’s regional wireless network after the integration process is wrapped up in early 2014.
Verizon Wireless, which previously controlled just one-third interest of Mohave Wireless, is now the sole owner of the latter. Apart from the acquisition from Frontier Communications, Verizon Wireless also purchased the remaining one-third partnership interests from the privately held communication firm – Rio Virgin Telephone Company.
Stamford, Connecticut based Frontier Communications – which has business tie-ups with AT&T Inc. (T) – currently holds a Zacks Rank #3 (Hold). We believe that the company’s several initiatives such as new product deployments, broadband expansion, and cash flow management by reducing operating expenses will be accretive to its long-term growth prospects.
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