ANCHORAGE (AP) -- They've relied for 30 years on oil and trees to make money. Now three Alaska Native corporations have turned skyward in search of profit, bidding on licenses to provide cell phone service across the nation.
Sealaska Corp., Arctic Slope Regional Corp. and Doyon Ltd. formed a joint venture last fall called Alaska Native Wireless. They want to capture a slice of a burgeoning industry that added more than 21 million new U.S. customers last year.
The new Native venture drew industrywide attention in January with an eye-popping $2.9 billion in bids on wireless licenses auctioned by the Federal Communications Commission. The company landed rights to provide wireless services in such major markets as Los Angeles and New York City.
''Our participation in the FCC auction is a huge step forward in establishing a role for our companies and our shareholders in the new economy,'' said Jacob Adams, president and chief executive of Barrow-based ASRC, managing partner for Alaska Native Wireless.
The big money behind Alaska Native Wireless comes from its partner, telecom giant AT&T Wireless. That company provided $2.6 billion of the total bids and owns a 39.9 percent stake. The three Native corporations contributed $95.5 million, while other investors put up the rest, said Conrad Bagne, chief operating officer for Arctic Slope.
It's a big gamble for struggling Sealaska. The Juneau-based company told its Tlingit, Haida and Tsimshian shareholders at a late February meeting to brace for corporate losses of up to $120 million last year. The company blamed poor investments, an insipid stock market, and the lowest lumber prices in a decade.
Given its money woes, Sealaska's decision to sock millions into Alaska Native Wireless involved substantial risk. Sealaska told shareholders at a meeting last month that the wireless venture and a new $32 million investment in a California Indian casino form the backbone of its strategy for turning the tide of red ink.
Sealaska's newly-appointed chief executive Chris McNeil didn't return phone calls from the Anchorage Daily News requesting comment on the wireless venture. Nor did company spokesman Ross Soboleff.
For Arctic Slope, its investment in Alaska Native Wireless was less of a gamble because of the Barrow corporation's substantial oil wealth. ASRC also has a successful track record of running companies and is probably more ''risk-tolerant'' than other Native corporations, said Bagne of Arctic Slope.
Doyon views the wireless investment as a ''manageable risk,'' said Allen Todd, the Fairbanks company's general counsel. The Doyon board of directors decided at least six years ago to diversify beyond oil field services and identified tourism and technology as growth industries, Allen said.
Wireless communication is one of the world's fastest-growing industries.
The 44 licenses Alaska Native Wireless snapped up in the auction include such major markets as Portland, Denver, Minneapolis and Tampa, as well as parts of Interior and Southeast Alaska. The licenses cover a population of 71 million, a company statement said.
Alaska Native Wireless' plunge into the license bidding came in the wake of a similar move by Anchorage-based Cook Inlet Region Inc., which won licenses in a similar auction that led to a huge stake in VoiceStream Wireless, one of the industry's biggest players.
In December, CIRI distributed $314 million to shareholders after it converted its partnership interests into VoiceStream stock that was valued as high as $1.6 billion in July, pending a proposed takeover by Deutche Telekom. CIRI shareholders are to received another big dividend later this year.
Alaska Native Wireless is taking a more cautious dip into wireless waters, said Bagne. It has no plans, at least at this point, to convert its investment into AT&T stock, although there's always that option as an ''exit strategy'' if the deal sours, he said.
Doyon attorney Todd noted that FCC rules require Alaska Native Wireless to retain ownership of the licenses for at least five years.
Bagne and Todd were reluctant to say more about how Alaska Native Wireless intends to operate because the three Native corporations are still writing their business plan and FCC approval of the license transfer is pending.
AT&T was also cagey about how the venture will work.
''We'll work with them to utilize the spectrum in markets where we need the capacity,'' said Rich Blasi, an AT&T Wireless spokesman in Basking Ridge, N.J.
Blasi said the Alaska Native corporations can lease the spectrum to other companies, like AT&T Wireless, that have a customer base and expertise in building telecom infrastructure.
Alaska Native Wireless plans to launch a demonstration project, probably in the Interior, to expand wireless service on Native-owned land, Todd said. The company plans to take advantage of an FCC policy to promote telecommunications on Indian reservations, allotments and Alaska Native corporation land, much of which is technologically underserved.
But while expanding telecom service to its Native shareholders may be a social goal for Alaska Native Wireless, the company is clearly focused on the big markets. Of the $2.9 billion bid in the FCC auction, half of that went to capture a license in New York City.
Peninsula Clarion © 2016. All Rights Reserved. | Contact Us