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GCI invests in wireless

Thu, 12/08/2005 - 6:45am
Jeff Baumgartner, CED

Expanding its view on the coveted "quad-play," General Communication Inc. (GCI) has invested $29.5 million in Alaska DigiTel LLC (AKD), a wireless provider that services Anchorage, the Mat-Su Valley, Juneau and Fairbanks.

In exchange, GCI will obtain a majority equity interest in AKD, but will not own voting control of the venture.

GCI views the investment "as an incremental way to participate in future growth of the wireless industry in Alaska," and notes that its existing cellular partnership with Dobson Communications remains intact. GCI said it will continue to compete with AKD for cellular subs in the Alaskan market, but the deal is expected to increase its wireless earnings by about $5 million in 2006.

AKD, which has north of 24,000 subscribers, said the agreement will allow it to buy out some investors, refinance most of its outstanding debt, and maintain its existing business plan. Its management will not change under the agreement with GCI.

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