AT&T expands wireless coverage with Dobson buy

The iPhone won't be just for customers living in the big cities. On the day it is introducing the hugely hyped cell phone, AT&T announced it will acquire wireless provider Dobson Communications for $2.8 billion in cash.

Dobson, which markets its service under the Cellular One brand, provides cellular services mainly to rural and suburban areas. Its network covers 17 states and has the potential to serve 13 million people.

Along with the network, AT&T will get Dobson's 1.7 million customers. The companies say their networks overlap only minimally.

The two carriers have had a relationship since 1990, when Dobson began offering roaming services to AT&T.

The boards of both companies have approved the deal, and Dobson's majority stockholder has also approved it. AT&T said the deal will help it realize significant annual savings in reduced roaming expenses.

The deal is subject to regulatory approval. Because there is little network overlap, AT&T expects to obtain approval by the end of this year.

AT&T is only just digesting its acquisition of Cingular Wireless, one of the biggest operators in the nation. Adding Dobson's customers to its ranks of subscribers, AT&T will have 63.9 million subscribers.