ATN International inked a deal to sell some spectrum to Verizon in an offshoot of the operator's 2023 managed services agreement. ATN officials hinted that more such spectrum deals might be on the way.
ATN International recently agreed to sell some cellular, AWS and PCS spectrum licenses to Verizon. And that probably won't be its only such sale.
"It's something that we're always looking at, how do we extract the highest value?" explained ATN CEO Brad Martin during the company's recent quarterly conference call, according to Seeking Alpha. Martin was responding to a question about ATN potentially selling some spectrum licenses.
Continued Martin: "We obviously are still using spectrum for certain service lines. But certainly, the exit of our retail mobility, which is something that is in process as we speak, will certainly be something that we look at and something that we are always looking at how we can optimize that particular asset base."
Martin declined to provide specifics, including how ATN might value its spectrum holdings.
ATN isn't the only rural wireless network operator in the process of selling some of its spectrum holdings.
"We continue to work on opportunities for monetization of the remaining spectrum, but as this is an ongoing process, I won't be able to share any additional details," said UScellular CEO Laurent Therivel during his company's recent quarterly conference call.
Just last month UScellular said it would sell $1 billion worth of spectrum to Verizon. That deal dovetails with UScellular's wider $4.4 billion deal with T-Mobile, announced in May.
Broadly, the ATN and UScellular transactions again highlight the difficulties that smaller wireless network operators have faced in competing with heavyweights like Verizon and T-Mobile. Other smaller wireless network operators that have sold their spectrum and exited the market include West Central Wireless in Texas, Missouri's Chariton Valley Communications Corporation (CVCC), Montana's Triangle Mobile and Bluegrass Cellular in Kentucky.
ATN's Verizon deal
In a recent FCC filing, ATN disclosed that it plans to sell some cellular, AWS and PCS spectrum licenses to Verizon. Those licenses are scattered across rural areas in Arizona, Colorado, Montana, Nevada, New Mexico, Texas, Utah and Wyoming.
"In addition to expanding coverage, Verizon Wireless's purchase of spectrum ... also help to improve capacity on its wireless network," the companies told the FCC. "This will allow Verizon Wireless to handle more data traffic and provide faster speeds for its customers most immediately in the fast growing suburbs outside of Denver, CO."
But an ATN official said the transaction won't affect the company's ongoing operations. "We did recently enter into an agreement with Verizon to sell certain non-core spectrum in the southwestern US as we continue to transition from our legacy wholesale roaming business. We own and utilize the majority of our spectrum in the southwestern US in our carrier managed services and fixed wireless business," ATN's Michele Satrowsky wrote in response to questions from Light Reading.
Satrowsky said ATN didn't disclose the financial terms of the transaction "due to the immaterial nature of the sale."
In early 2023, ATN inked a major managed services agreement with Verizon. "We will provide a variety of network, infrastructure and technical services that will help deliver next generation wireless services to Verizon's subscribers in our current operating area in the southwestern United States," ATN said in a recent SEC filing of the deal. "We will upgrade our wireless service in specific areas and provide services to Verizon for an initial term ending in 2030."
The troubles continue
ATN has been shifting its wireless strategy in recent years, moving away from mobile roaming and retail sales efforts.
But ATN remains troubled. The company in the third quarter said it would lower its earnings guidance for 2024. The company also hinted at "strategic actions intended to align our cost structure with current revenue levels," though it didn't disclose exact details.
In ATN's US Telecom division specifically, company officials blamed a bigger-than-expected revenue shortfall on slower customer growth alongside the end of federal programs like the Affordable Connectivity Program (ACP). The company said it would take a $35 million impairment charge during the third quarter due to the situation.
"While there is more work to do in our US Telecom segment to stabilize and grow revenues and profitability, we are confident in our ability to leverage our position as a trusted partner with our carrier customers, our recently strengthened executive sales leadership and our existing fiber-based network assets to improve performance," Martin, the ATN CEO, said.
Earlier this year, one of ATN's top shareholders urged the company's management to either sell the business or go private.
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