Hopi Tribe to acquire CenturyTel Arizona operations

Tribe will upgrade, expand service

KYKOTSMOVI -- Hopi Telecommunications Inc. (HTI) has reached agreements with CenturyTel Inc. and Rural Utilities Service, a division of the U.S. Department of Agriculture, to acquire, upgrade and manage telephone service for the Hopi Tribe in Arizona.

The acquisition of CenturyTel's Arizona properties and upgrades and expansion of the company's equipment is being made possible through $11,976,600 in loans provided and guaranteed by the Rural Utilities Service. The loans will be repaid through revenue generated by HTI telephone and wireless internet service. HTI is a tribally owned enterprise.

"This is an exciting day, as the Hopi Tribe is now poised to enter the 21st Century in the delivery of modern and efficient land-based and wireless telecommunications to Hopi citizens and businesses," tribal Chairman and CEO Wayne Taylor Jr. said.

"Efficient telecommunications is crucial infrastructure in the creation of an economy on the Hopi homeland. It also is imperative that the Hopi Tribe, as a sovereign nation, assumes absolute control of utility service to the Hopi people. This is, indeed, a great and monumental day for the Hopi Tribe, its villages and the Hopi people."

The Rural Utilities Service loan agreements were received Sept. 28 by HTI. A contractual agreement between HTI and CenturyTel to acquire the company was reached on October 31, 2005. HTI will have to obtain regulatory and other approvals before the sale can be finalized.

Concurrent loans are being made to HTI in the amount of $6,798,000 by Rural Utilities Service and $4,758,600 by Rural Telephone Bank, also a division of the U.S. Department of Agriculture. An additional $420,000 loan to HTI from the Federal Financing Bank is being guaranteed by Rural Utilities Service.

According to the loan and acquisition agreements, $11,750,000 is being used to:

¥ acquire CenturyTel's three exchanges in Arizona and about 2,000 customers;

upgrade the existing switch;

¥ add digital loop carriers;

¥ upgrade the existing microwave system;

¥ add approximately 45 new miles of fiber-optic plant and 27 new miles of copper plant;

¥ finance initial operating costs;

¥ provide additional system improvements.

"The main objective of HTI will be to provide quality communications services to the Hopi Tribe. Since we are owned by the Hopi People, our success will directly benefit all Hopi People, not just the interests of a few individuals. We are truly excited about the recent events and look forward to a very challenging future!" HTI President and General Manager Brent A. Kennedy said.

The acquisition of the Keams Canyon, Kykotsmovi and Polacca exchanges comes on the heels of a Rural Utilities Service $750,000 grant to bring broadband service to the 900 residents of Moenkopi. The network will be available to residents, schools, the community center and law enforcement and fire department personnel.

The grant was one of 19 awards totaling $9 million distributed by Rural Utilities Service to largely rural areas of the United States and Puerto Rico. Since its inception four years ago, the Community Connect Broadband Grant program has provided 109 grants and invested over $39 million to provide service to local communities.

Wireless Internet services and teleconferencing will soon be standard on the Hopi homeland thanks to a $2.3 million federal award from the Economic Development administration (EDA) division of the U.S. Department of Commerce. The EDA in 2000 funded a model program on the Hopi Reservation as part of a nationwide effort to provide broadband services to Native Americans and other rural areas.

The funds are being used to obtain a digital microwave signal from a carrier in Flagstaff, transmitting the microwave signal to the Hopi Reservation. Once transmitted, the signal will be distributed to government agencies, hospitals, schools, small businesses and homes using WI-FI technology to provide wireless broadband Internet services through the reservation.

The tribe previously used an EDA grant and donations from the Bill and Melinda Gates Foundation and Judicial Services Fund to launch the Hopi Broadband Wireless Internet Project. The project launched the delivery of high speed Internet services to several Hopi villages in May 2002.

(The Hopi News Service/ The Hopi Tribe provided the above information on the acquisition of CenturyTel Arizona.

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