CenturyTel to acquire Verizon access lines

CenturyTel announced yesterday the largest transaction in the company’s history: the intent to purchase 675,000 local access lines in Alabama and Missouri from Verizon Communications for about $2.2 billion.

Glen Post, CenturyTel’s president, CEO and vice chairman of the board said the acquisition fits well with the company’s existing footprint: “The properties are an excellent fit with existing market clusters, particularly in Missouri. We [also] will have an excellent cluster in Alabama properties.”

Post added that CenturyTel has “reviewed calling plans and the regulatory framework” and is confident it will not face the same issues it faced in Arkansas and Wisconsin as a result of a prior acquisition from Verizon.

The deal—which is expected to close in the second half of 2002 pending approval from the FCC, the U.S. Department of Justice, and the public service commissions in Alabama and Missouri—provides CenturyTel with about 306,000 access lines in Alabama, and 98 exchanges and about 369,000 access lines in Missouri. About 950 Verizon wireline employees will join CenturyTel at the sale’s closing—450 in Alabama and 500 in Missouri.

These markets represent a higher number of business access lines than CenturyTel has in other markets, presenting the carrier with “strong data and services potential in these areas,” according to Post. “We expect to drive revenue opportunities in these markets by expanding the availability of enhanced services such as voice mail, long-distance, Internet and DSL, and we believe we can drive incremental revenues between $45 million and $85 million on an annual basis in three to five years,” he said.

The sale does not affect Verizon’s long-distance, Internet, wireless and directory publishing services offerings in the two states.

—Amalia Parthenios, staff writer