OKLAHOMA CITY, Oct. 24, 2002 (PRIMEZONE) -- Dobson Communications Corporation (Nasdaq:DCEL) announced today that it has signed a non-binding letter of intent under which it would exchange its two remaining wireless properties in California for two AT&T Wireless (NYSE:AWE) properties in Alaska. In addition, AT&T Wireless would transfer to Dobson all of the Dobson Series AA preferred stock that it currently holds. The transaction remains subject to the execution of definitive agreements, final corporate and board of director approvals, federal regulatory approvals and certain other conditions.
The letter of intent calls for AT&T Wireless to transfer to Dobson its ownership in the Anchorage, Alaska Metropolitan Service Area (MSA) and Alaska Rural Service Area (RSA) No. 2 markets. The Anchorage MSA includes a population of approximately 262,100, all of which is covered by the AT&T Wireless network in that market. The AT&T Wireless network in Alaska RSA No. 2 extends primarily north, northeast and south of Anchorage and covers almost 98 percent of the RSA's total population of approximately 168,300. The covered area includes the cities of Wasilla, Palmer and Glenallen to the north of Anchorage, and Valdez, Homer and Seward to the south. Dobson already owns Alaska RSA No. 1, which includes the city of Fairbanks, and Alaska RSA No. 3, which includes the city of Juneau.
The letter of intent calls for Dobson to transfer to AT&T Wireless its ownership interest in the Santa Cruz, California MSA and California RSA No. 4 markets. The Santa Cruz MSA covers a population of approximately 255,600, and California RSA No. 4 includes a population of approximately 386,900. California RSA No. 4 covers the counties of Madera, Merced and San Benito; the cities of Madera, Merced, Hollister and Los Banos; and a portion of Interstate 5. The wireless networks in both markets cover 100 percent of the population.
AT&T Wireless would also transfer to Dobson its Dobson Series AA preferred stock, which AT&T Wireless purchased in February 2001. Upon the transfer of the Series AA preferred stock, AT&T Wireless would own less than 5.0 percent of Dobson's fully diluted Class A common stock. Upon receipt of the Series AA preferred stock, Dobson plans to cancel that issue.
This transfer agreement has no effect on Dobson and AT&T Wireless's joint ownership of American Cellular Corporation.
"This would further rationalize and concentrate our operations and is consistent with the focus on improving the profitability of our local service business," said Everett Dobson, chairman and chief executive officer of Dobson Communications. "Our limited licensed footprint in California increases the challenge of offering competitive local plans that generate profits in line with our operating goals.
"After this exchange, our networks in Alaska would cover the three largest cities and their adjacent markets, which combined are home to more than 95 percent of the state's population," he said.
All four of the Alaska and California networks in the exchange are 100 percent TDMA digital equipped.
Dobson noted that Lehman Brothers is acting as its advisor in the exchange transaction.
Dobson Communications is a leading provider of wireless phone services to rural markets in the United States. Headquartered in Oklahoma City, the Company owns or manages wireless operations in 17 states. For additional information on the Company and its operations, please visit its Web site at www.dobson.net.