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CenturyTel Exits Wireless Field

Faced with mounting pressure to compete against national wireless digital phone carriers and still remain profitable, one regional competitive local exchange carrier (CLEC) is calling it quits.

CenturyTel executives announced Tuesday the sale of their wireless equipment and spectrum licenses to ALLTEL Corp. for $1.3 billion. The CLEC -- with 800,000 customers signed up to its wireless phone service -- expects to close the deal in the third quarter of this year.

The carrier has been fighting an uphill battle in the wireless phone industry, competing against powerhouse outfits like Verizon Wireless, Cingular Wireless and AT&T's mLife. All three have subscribers numbered in the millions.

The carrier has been making several moves lately, in a departure from the wireless phone industry and increased presence in the more conventional, staid landline market. Glen Post III, CenturyTel president and chief executive officer, said the sale will help pay for the company's land-based network.

"We are pleased to announce the completion of our wireless separation process with this definitive agreement with ALLTEL," he said. "We believe the disposition of our wireless assets, along with the previously announced acquisition of access lines from Verizon, positions CenturyTel as the premier pure play rural local exchange provider in the industry."

CenturyTel is in the middle of an access line purchase in Missouri and Alabama from Verizon Communications , which should be finalized in the Fall of 2002. The purchase gives the CLEC increased presence in the 21 states its serves throughout the U.S.

Friday, the company announced the purchase of the network and customer base of KMC Telecom Holding Inc. in Shreveport and Monroe, LA.

The carrier has been dumping its wireless properties the past year to fund its land-based expansion, selling 30 spectrum licenses to Leap Wireless International for $185 million. Officials say they need the money to offset the expected $15-20 million in operating losses for the year in its fiber and phone divisions.