Clearer signal for GCI: sale boosts company's holdings.

GCI recently bought more than 80 percent of Alaska DigiTel, a cellular company with 33,000 subscribers.

Although the deal was announced in late 2005, it took a year to get final FCC approval. The deal closed in January 2007. Now, Alaska DigiTel has more capital to invest in general wireless, which will enable it to grow.

"We have big plans," says Jeff Roe, chief operating officer for Alaska DigiTel.

"We want to increase our cell sites by 50 percent at the end of the year. Next year, we plan to increase our sites by 100 percent. We plan to expand our coverage to Fairbanks, Juneau, Kenai and Soldotna, while upgrades in Anchorage will be ongoing."

GCI's investment in Alaska DigiTel provides new capital and loan money. Some of the proceeds are planned to buy out some of the private investors and refinance most of the company's debt.

As the banker and owner, GCI owns 80 percent of the company, which is a significant investment on its part.

Now Alaska DigiTel can build more sites and expand its coverage.

DigiTel plans to ramp up the process, but is conducting research marketing first. It wants to enhance its customer-delivery service in its process of expansion and revamping.

BACK WHEN

Founded by an investment company from Memphis, Tenn., DigiTel started operations in Anchorage in 1998 and has continued to build its business to where it is now.

Roe, who has been in the telecom business for 30 years, joined Alaska DigiTel mid last year. Roe came from Alascom, but has worked previously with GCI and knows the management team. Roe chose to work with Alaska DigiTel because he wanted to do something special, he says.

UPGRADE IN THE WORKS

Alaska DigiTel is currently in the process of remodeling its stores. In Anchorage, Dimond Mall's kiosk will become a full-fledge store as will Northway Mall's kiosk.

Alaska DigiTel is opening a store in South Anchorage and Soldotna and Fairbanks later this year. Eagle River also has a sales store. Alaska DigiTel will be promoting its new stores this month and its new e-commerce rollout.

It is investing money in its Web site and making plans to improve its switch environment.

Plans are under way to improve service. The company will be selling cell phones out of its call center.

Currently, Alaska DigiTel is third to Cellular One and ACS in cell service, but is slowly closing the gap. It may be less than one-third the size of its competitors, but it is growing.

"We will be a more significant competitor than in the past," says Roe.

Although this is the seventh acquisition Roe has been associated with, he says transitioning the gap between owners is always challenging.

Alaska DigiTel's new office at its Fireweed location in Anchorage will handle the overflow from its Commercial Drive location where some employees have had to share offices in the transition and expansion stages.

The accounting department, sales and finance will all move to Fireweed location, while the engineers will stay at the Commercial Drive location.

"We're a growing enterprise in a growing environment," says Roe.

"It's an exciting field to be in. (Although), the year 2007 will not see amazing technology. We are building the infrastructure to support all the services. That's our emphasis this year."

QUALITY PEOPLE

Alaska DigiTel's focus will be to hire more of the same high-caliber employees that will enable it to become a real factor in Alaska's wireless future, says management.

In its look at people development, the company sees a need for more talented people. Its goal is to become an attractive employer and recruit more skilled people.

At 85 employees, plus a few contractors, Alaska DigiTel will have more than 100 employees by the end of the year.

THE BIG SWITCH

A big switch occupies the basement of Alaska DigiTel's original location on Commercial Drive. Like a computer, it is the central system of the network. All cell routing goes through the switch.

It's a significant investment that needs to be maintained 24 hours a day, 365 days a year.

Even the software continually needs to be upgraded.

It requires an air-handling system to keep the environment cool. This, too, needs to be monitored 24 hours a day.

The air must continually be filtrated and the fire-suppression system is critical to protect the switch. Big power batteries and a generator stand by for any emergency.

VALUE

Alaska DigiTel offers basic voice service for the value shopper with the lowest prices, and good service, says Roe.

The business is now more solid in Anchorage with as good of coverage as other carriers.

"Our prices are less across the board significantly," says Roe. "We're a better value than anybody else with great roaming coverage."

The biggest companies in the country, AT&T, Verizon and Sprint, all have investments in the cell business, a business that is growing today. Approximately 50 percent to 60 percent of the population in Anchorage has cell phone service today. This compares to as much as 70 percent stateside. DSL and cable usage is higher here than the rest of the country.

Other states may have more coverage, but Alaska has a lower population.

Alaskans also tend to be highly educated and to adopt new technology.

Eventually the remote areas of Alaska, such as the Bush, will enjoy more services to different locations. This will not happen until more technological advances are developed to make it more economical.