Verizon Wireless buys Rural Cellular

Nationwide Verizon Wireless announced plans Monday to buy the regional Rural Cellular Corp. for $757 million in cash, a move that would likely result in better cellular service for customers of both, a Verizon spokesman said Monday.

If the deal goes through, Verizon customers should get better cell phone reception in rural areas while users of Rural Cellular’s Unicel network should find the same in urban areas such as Portland, said Mike Murphy, Verizon Wireless New England spokesman.

“Unicel customers will get a whole width and breath of services with a national footprint instead of a regional footprint,” Murphy said Monday.

Rural Cellular’s Unicel network served 716,000 customers as of March 31, spread across 15 states including Maine, New Hampshire and Vermont.

Still, representatives from both companies said it was too early to tell whether the deal would lower cellular service rates or roaming fees or actually boost reception or the number of transmission towers overall in Maine, a state that has generally poor reception in its most rural confines.

Verizon Wireless sought Rural Cellular to expand its reach and its tower signals northward by getting Rural Cellular’s towers, said Nancy Stark, a spokeswoman for Verizon Wireless.

The deal has been approved by the boards of both companies and is expected to close in the first half of 2008, subject to governmental and regulatory clearance and approval of Rural Cellular’s shareholders.

Rural Cellular shareholders will receive $45 per share in cash, representing a 16 percent premium to the stock’s average closing price over the last 10 trading days and a 41 percent premium to its closing price Friday of $31.88.

Verizon Wireless is a joint venture of Verizon Communications and Vodafone. Including assumed debt, the company values the deal at about $2.67 billion.

Wayne Jortner, general counsel of the Maine public advocate’s office, said he had concerns about the deal because it would mean fewer wireless carriers and less competition in a state that currently has only five major wireless competitors.

“Going from five to four is a very bad thing in my opinion,” he said from Augusta.

Also, Jortner said he felt that Unicel was doing a good job of expanding its service in rural Maine thanks to federal grants and that having Verizon as an owner won’t necessarily mean additional improvements for Mainers.

Finally, the different wireless technology used by Unicel and Verizon isn’t compatible, and that could cause problems for customers in Maine, he said.

But Brian Curtin, a manager at NDC Communications of Etna, which installs and services cellular towers throughout New England, said he could not see how the deal could fail to provide better service if the companies share towers and services.

Verizon transmits in the 1900-megahertz range, which is most effective where buildings and populations are more dense, while Unicel’s signal is in the 800-megahertz range, which carries farther, Curtin said.

“People will not see a degradation of service. Probably they will see [improvements],” Curtin said Monday. “To say where it will be without a coverage map in front of me is impossible.”

Another hint of improved cellular services: Verizon Wireless activated more than 100 cell sites in Maine last year as part of a $320 million investment in New England, Murphy said.

To help keep Unicel customers on their system, Verizon Wireless would maintain Rural Cellular’s GSM network and overlay it with its CDMA service, which carries more bandwidth, or service options, before migrating Unicel customers to the CDMA system, Stark said.

The deal comes one month after AT&T Inc. agreed to buy larger rural wireless service provider Dobson Communications Corp. for $2.8 billion.

The Associated Press contributed to this report.