It was announced today that Alaska Communications is in the process of selling its wireless assets and 33 percent of its interest in the Alaska Wireless Network to GCI for $300 million. The Alaska Wireless Network was a joint agreement to provide the infrastructure so that ACS and GCI could combine their services. It was approved by the FCC last year. Now the network will be fully owned by GCI.
If the deal goes through, the transfer will happen next year and the services of the roughly 109,000 ACS mobile users will be uninterrupted.
Heather Cavanaugh, the director of corporate communications for ACS, said that wireless services accounted for about a third of ACS’s business. She said that the $300 million will allow the company to pay down debt, from $415 million to about $165 million, to focus on broadband information technology services, like telemedicine and distance learning for schools, which it had already begun to do. Recently, ACS received a part of a contract from the state to provide broadband.
ACS, currently with roughly 850 employees, will be the largest company to focus exclusively on broadband technology in the state.
It seems like a smart, if not a last-gasp move. The company was once a dominant player in the cell business in Alaska. Then, in 2003, Liane Pelletier took the reins at ACS. It’s said that she over-inflated the value of the stock by guaranteeing high dividends, instead of reinvesting in the company. It made ACS’s private-equity owners temporarily happy, but she left the company with an unsustainable business model which they’ve struggled with since.
While ACS was struggling, GCI began to move heavily into wireless in 2008.
Wall Street reacted slightly to the news. ACS’s stock opened at $1.25, where it’s been hovering for about a month. After-hours trading brought it up to $1.73, from a five-year high of $11.51.
GCI’s stock opened at $12.26. After-hours trading brought it to $12.42.
ACS delayed this announcement until Verizon came on the scene. In the first half of 2014 they closed 40% of their retail stores, then signed on agents (little business owners) who they are sticking with two year leases (these needed to be acquired to be an agent). They are breaking contracts and not batting an eye at what it did to the very people who were on the front line when they closed a store and left people angry. Big corporations are more corrupt then ever!
GCI made tons of money installing internet and cell phones in the Bush thanks to federal subsidies from the FCC ordered by the Obama Admin. That money tree got plucked dry, now GCI has to make money serving places like Chevak.
First off, I hope this reorganization will help ACS. We need Alaskan companies to strive against Big Red (Verizon) and the Death Star (AT&T). Say what you will about GCI but they too are probably struggling against these nationwide behemoths.
Keep it Alaskan folks…..oh and customer service….. I think GCI has WAY better service than the other 2 because when I have a problem, it’s resolved in a timely manner and it’s local.
Are we too late to outbid GCI? This sounds like another excellent business opportunity for the Alaska Legislature. Won’t they need cell phones on their gas line?
I feel bad for all the former ACS customers who are now forced to choose between two bad options. Customer service at GCI has traditionally been beyond bad and Verizon can’t be bothered with customer service I the first plac.
Maybe I’ll give up the cell phone completely. How’s that for an idea?
As they say on Shark Tank, someone should take ACS out behind the barn and shoot it. Dead on their feet already.
When the dust settles in about 3 years, we’ll be left with AT&T, Verizon and GCI trying to hang on. These big boys don’t fool around.
I feel bad for ACS employees.