Dobson Communications (NASDAQ: DCEL) sits in a strange little niche of the telecommunications industry. It provides wireless service to 1.7 million rural customers. And, it has put itself up for sale. The company has a market cap of about 1.7 billion.
Dobson makes almost a quarter of its income from collecting roaming fees from its larger competitors like Verizon Wireless. But, many of those companies are building their own infrastructure to reach consumers outside of urban areas.
It may be that Dobson's board saw the sales of Alltel (NYSE:AT) and figured that it is a good time to cash in by selling to private equity interests. But, Alltel has the fifth largest cellular customer base in the industry.
Dobson's share price is up almost 20% in the last three months, perhaps on speculation that the company will be sold.
But, Dobson may be too small and too dependent on FCC funding for rural phone service. There is conversation that these fees may be cut back or ended.
Some companies just can't find buyers, no matter how much cash is floating around the markets. Dobson may be one of those.
Douglas A. McIntyre is a partner at 24/7 Wall St.
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