Cingular Swaps Licenses to Cut Roaming Fees

Cingular Wireless and Dobson Communications have signed a definitive agreement to exchange Dobson's ownership in its Eastern Shore of Maryland cellular property (Maryland RSA 2) for Cingular's ownership in its Northwest Michigan cellular property (Michigan RSA 5). As part of the proposed transaction, Cingular will pay Dobson US$23 million and transfer to Dobson its one-percent ownership interests in Texas RSA 2 and Oklahoma RSAs 5 and 7. Dobson is the majority owner of these three markets. The companies expect to complete the transaction in the first quarter of 2004.

The companies have also agreed to assist one another in building out GSM/GPRS technology in Maryland RSA 2 and Michigan RSA 5. The details of the build-out plans for the two markets are expected to be finalized within 30 days.

The Maryland property covers a population of approximately 471,700, including the cities of Ocean City, Salisbury, Easton and Cambridge. The Michigan property covers a population of 169,400, including the cities of Cadillac, Manistee, and Ludington. The exchange will result in a net loss of approximately 17,000 subscribers for Dobson.

Dobson currently manages the Michigan property for Cingular. The Company stated that a majority of total revenue in Maryland RSA 2 has been derived from roaming, while total revenue in Michigan RSA 5 is comprised primarily of local service revenue. Dobson said that the exchange of properties will not have a material impact on its operating earnings or capital expenditure expectations for 2004."

Posted to the site on 14th October 2003