AT&T to Buy Alltel's U.S. Wireless Business for About $780 Million

DALLAS -- AT&T (T) said Tuesday that it has reached a deal to buy Alltel's U.S. wireless operations for about $780 million to boost its spectrum in rural areas.

The Dallas telecommunications company is buying the licenses, retail stores and network assets, along with about 585,000 subscribers, from Atlantic Tele-Network (ATNI) The news sent the Beverly, Mass.-based company's shares up 9 percent to $42.74 in premarket trading.

Alltel's network covers about 4.6 million people in mainly rural areas across six states: Georgia, Idaho, Illinois, North Carolina, Ohio and South Carolina. It generated revenue of about $350 million for the first nine months of 2012.

AT&T said it expects that as it upgrades the network, mobile Internet service will improve for both Alltel customers and AT&T customers who roam in those areas.

The deal remains subject to approval by the Federal Communications Commission and Department of Justice. The companies said they expect the deal to close in the second half of the year.

AT&T said it doesn't expect integration costs related to the acquisition to significantly affect its earnings or cash flow.

AT&T shares were unchanged before the opening bell.