Question-and-Answer Session
Operator
(Operator Instructions) The first question comes from Jonathan Schildkraut of Jefferies.
Jonathan Schildkraut - Jefferies
Hi this is Anupam covering for Jonathan here. I was just wondering if you could go over once again just the way the cost and revenues will shift between the various segments, once the Dobson deal has rolled off.
John Lowber
Okay, do you want to take a shot at that one Ron?
Ronald Duncan
Sure. Let’s give it to you in a broad summary form and then if you want to drill down, deep within that rather than holding everybody up on the call you could call us back afterwards. Basically, at last years run rates there were about $25 million in revenues that we paid Dobson and Dobson paid us and the intent of the agreement that we struck with AT&T Mobility was to preserve the relative economics of that arrangement by eliminating our payments to them for a wireless service and allowing them the flexibility to move off of our network.
We have said previously that there was about $17 million in carrier EBITDA associated with that $25 million in revenues and there is probably a larger amount of wireless EBITDA associated with our $25 million in payments to them post transition after we incur certain transition expenses.
On July 1, AT&T Mobility was free to stop using GCI transport facilities and they have commenced the process of migrating traffic off of our network. We’re unable to say how quickly that migration will occur, although we expect most of it to be done fairly rapidly and certainly the significant majority to be done by the end of the year.
We are also approximately in a position to begin migrating our wireless customer off of their network, effective with billing cycles that rolled into place during June. We stopped paying four minutes of use under our docs with AT&T agreement and are now receiving service in a bucket of essentially three minutes.
We are about to begin the process of migrating our 35,000 GSM customers to our own network that will involve changing out a SIM card in each of those phones and we anticipate $6 million to $8 million in transition expenses associated with that migration which will be incurred we believe over the next three to four quarters and once again we’re unable to predict the exact speed or sequence of that transition.
- To read the full transcript on Seeking Alpha, click here »
