telecom@eecs.nwu.edu (TELECOM Moderator) (01/21/91)
Centel has turned over its local telephone company operations in Iowa and Minnesota to Rochester Telephone Corporation of Rochester, NY for $100 million in cash, ten percent of Rochester Tel's stock and minority ownership of Rochester Tel's cellular telephone franchises. The transaction, which affects 85,000 telephone lines in Minnesota and 50,000 in Iowa is in keeping with Centel's move away from local telephone service and into cellular service according to John P. Frazee, Jr., Centel's chairman and chief executive officer. Centel is acquiring a minority share in various cellular systems serving 630,000 subsribers in exchange for its local telcos. Rochester Telephone is the parent company of 33 telephone companies. The $100 million it is paying to Centel in the deal will help Centel pay its taxes and reduce its outstanding debts. The specific areas affected by the change of ownership are suburban Minneapolis, central and western Minnesota, and northern and western Iowa. Centel employees in those locations are being transferred to Rochester Telephone as part of their continued employment. The majority, but not all of the cellular systems Centel will acquire in the deal serve rural areas around the USA. Centel will continue to maintain its corporate headquarters in the northwest Chicago suburban area. Regulatory approval is being sought now, and the transition is expected to be complete by June, 1991. PAT