Alaskan Telecoms Pool Resources to Fight Verizon Communications Inc. (VZ) and AT&T Inc. (T)

The AWN will be owned one-third by Alaska Communications Systems Group Inc (NASDAQ:ALSK) and two-thirds by GCI. Alaska Communications will get $100 million in cash and could get up to $190 million in preferred distributions over the first four years of the network’s operations. GCI will get whatever distributions are remaining during that time period. After that, all distributions will be made on an ownership percentage basis.

However, even though the two companies will be using the same network, they will remain separate companies and competitors for the retail market. The deal could work, but it still leaves four companies fighting over a very small pie.

Actually, I think in this case, we’d have to call it a cupcake.

Fool contributor Dan Radovsky owns shares of AT&T. The Motley Fool has no position in any of the stocks mentioned.

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