The announcement by General Communication Inc., or GCI, and Alaska Communications Systems Group Inc. comes as Verizon Wireless prepares to enter the Alaska market.
GCI and Alaska Communications said they had signed agreements to form The Alaska Wireless Network LLC, which would build and operate a statewide wireless system for GCI and Alaska Communications customers with the companies pooling their wireless assets, like cell sites. GCI would own two-thirds of the network and Alaska Communications, one-third. GCI also would manage the network.
Under the deal, GCI also would buy $100 million in wireless assets from Alaska Communications, which an Alaska Communications spokeswoman, Heather Cavanaugh, said would help strengthen the company financially. Those assets would be put toward the new network.
The companies would continue to market and sell plans independently.
The deal is subject to regulatory approval. Cavanaugh said it could take a year for the deal to win approval and close and another year or two for the companies to combine their wireless networks.
In a joint statement, Alaska Communications President and CEO Anand Vadapalli and GCI President and CEO Ron Duncan said the wireless business is, among other things, capital intensive and “requires scale to compete successfully against national carriers.”
“By combining our respective wireless assets, GCI and Alaska Communications can provide a state-of-the-art Alaska wireless network owned and operated by Alaskans for Alaskans,” they added. “We believe that The Alaska Wireless Network will provide the fastest, most geographically extensive, and most reasonably priced wireless services for Alaska subscribers, allowing us each to compete more effectively in the retail market.”
Demian Voiles, vice president for Verizon Wireless Alaska, said Tuesday’s announcement doesn’t change his company’s plans. Voiles said Verizon has been working hard in the state to build a network that will provide the same kind of service that Verizon customers in the rest of the country receive and provide Alaskans with “that choice they need.”
Verizon plans to launch its network in Alaska next year, he said.