Global crossing sells local carrier for $3.65bn

Telecommunications company Global Crossing will sell its local phone business for $US3.65 billion in cash to Connecticut-based Citizens Communications, the company announced yesterday.

The move will help Global Crossing focus on the broadband market and streamline its operations in North America, the company said in a statement. Global Crossing acquired its ILEC (incumbent local exchange carrier) business in its $US9 billion purchase of Frontier last year.

Global Crossing also agreed to provide long distance services for the business sold.

Global Crossing's one million local access lines are mostly in Rochester, New York, with others in Minnesota, Iowa, Wisconsin, and Pennsylvania. Revenue from the phone lines, including long-distance business they generated, was approximately $US805.2 million in 1999, according to the company.

With recent purchases in the West and Midwest from GTE and US West, citizens will begin approaching a more national reach, said Brigid Smith, Citizens' assistant vice president for corporate communications.

"It's certainly going to increase our presence in states where we weren't before," she said, noting that the acquisition increases the number of lines by about a third. Citizens' diversified business interests -- electricity and other utilities -- are being sold to move the company solely into phone service, said Smith.

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