GTE to sell 106,850 of its customer access lines in Illinois to Citizens Utilities for $303 million
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IRVING, Texas - GTE Network Services has agreed to sell 106,850 customer access lines (YE'98) in Illinois - or about 11 percent of its local operations in that state - to Citizens Utilities Corporation, a Stamford, Conn.-based telecommunications service provider, for $303 million.
The transaction involves 110 telephone exchanges and 89 GTE Network Services employees. Citizens agreed earlier this year to buy 245,562 customer access lines from GTE in Arizona, Minnesota, Nebraska, and parts of California.
This agreement signals the conclusion of the marketing of the wireline properties GTE identified for repositioning in November 1998. The company has reached agreements to sell slightly more than 1.6 million telephone lines in 13 states to seven different purchasers.
"We are pleased to reach an agreement with Citizens Utilities for these wireline properties in Illinois and to essentially conclude the sales aspect of our local telephone repositioning initiative," said John Appel, president-GTE Network Services. "Combined with the divestiture of the company's Government Systems businesses, GTE has significantly exceeded its goal of obtaining agreements to raise more than $4 billion in after-tax proceeds.
"Just as important as attaining our financial objectives, all of our wireline transactions - including this one in Illinois with Citizens - have included provisions for the fair and equitable treatment of the affected GTE Network Services employees." Appel said.
Proceeds from the sale of GTE's wireline properties and Government Systems business will be used for investment in other GTE strategic initiatives, such as the recently completed acquisition of Ameritech wireless properties in Illinois and Missouri and other data and Internet business opportunities.
The transaction with Citizens Utilities in Illinois does not affect GTE's offering of long distance and Internet services to customers in Illinois. Current directory publishing agreements will continue at least until December 31, 2001. In addition, current rates will remain in effect, but may be subject to review by state and federal agencies after the closing of the transaction. After closing, GTE will own and operate more than 800,000 customer access lines in Illinois.
In addition to the previous agreements with Citizens, since May, GTE has reached agreements to sell:
- 20,564 access lines in Alaska to the Alaska Telephone Exchange Acquisition Corporation (ATEAC), a consortium of four Alaska-based companies,
- 280,422 access lines in Iowa to Iowa Network Services, Inc.,
- 116,149 access lines in Missouri to Spectra Communications Group, LLC,
- 213,651 access lines in Arkansas and 64,798 access lines in Wisconsin to CenturyTel, Inc.,
- 61,612 access lines in Wisconsin to Telephone USA of Wisconsin, LLC,
- 519,176 customer access lines in New Mexico, Oklahoma, and Texas to Valor Telecommunications (formerly dba Communications, LLC),
- GTE Government Systems to General Dynamics, and
- GTE Information Systems, LLC, to DynCorp.
The GTE-Citizens transaction requires approval from the Illinois Commerce Commission, the Federal Communications Commission, and the U.S. Department of Justice. GTE closed the sale of its Government Systems business to General Dynamics in September 1999 and its Information Systems business to DynCorp in December 1999. All other transactions are expected to be completed in 2000.
Citizens currently operates all-digital, local exchange properties serving approximately one million access lines in 13 states: Arizona, California, Idaho, Montana, Nevada, New Mexico, New York, Oregon, Pennsylvania, Tennessee, Utah, West Virginia, and Wisconsin. Citizens also owns 83 percent of Electric Lightwave, Inc., a leading full-service, facilities-based integrated communications services provider of enhanced data service, frame relay, ATM and Internet access solutions to bandwidth intensive businesses and the e-commerce market.
With 1998 revenues of more than $25 billion, GTE is a leading telecommunications provider with one of the industry's broadest arrays of products and services. In the United States, GTE provides local service in 28 states and wireless service in 18 states, as well as nationwide long-distance, directory, and internetworking services ranging from dial-up Internet access for residential and small-business consumers to Web-based applications for Fortune 500 companies. Outside the United States, the company serves customers on five continents. Additional information about GTE can be obtained at
GTE's community and philanthropic programs target excellence in education, particularly math, science, technology and literacy. GTE also supports job training, delivery of health and human services, and the arts. The company's newest program is GTE Reads, a public charity designed to create public awareness, increase fundraising and support organizations dedicated to improving America's literacy levels. GTE customers can contribute to GTE Reads by checking off a box on their bill. Others can contribute through GTE Superpages.com http://www.superpages.com.