Centel

Centel Corporation was an American telecommunications company that operated local telephone networks, cellular services and cable television systems. Its roots reached back to the McGraw Electric Company, founded by Max McGraw in Sioux City, Iowa, in 1900. McGraw entered telecommunications in 1922 by acquiring Central Telephone and Electric Company of St. Louis, Missouri. A broader consolidation of more than 20 electric and telephone companies in 1926 created Central West Public Service Company, from which the electrical and telecommunications businesses gradually evolved along separate paths. The telecommunications business adopted the Centel name in 1982. Through its Central Telephone Company subsidiary, Centel served residential and business customers in a number of American markets. Its largest telephone territories included Las Vegas, Nevada; suburbs of Chicago such as Des Plaines and Park Ridge and nearby unincorporated Cook County communities; Tallahassee, Florida; and Charlottesville, Virginia. Before the 1984 breakup of AT&T, Centel was described as the fifth-largest telephone company in the United States after AT&T, GTE, United Telecom and Contel. Its local-exchange operations remained a core business, while cellular and cable television gave the company exposure to newer communications technologies and expanding media markets. Centel also held an interest in Keyfax, a Chicago-area teletext and videotex service operated with Honeywell and Field Enterprises. Keyfax was discontinued by 1986. The company later streamlined its portfolio by selling its cable television operations in 1989 and its electric utility holdings in 1991. The cable transactions covered systems in several states and generated aggregate proceeds of approximately $1.4 billion, including a reported net gain of more than $500 million. The electric properties in Kansas and Colorado were sold to UtiliCorp United for $345 million in 1991. By 1991, Centel reported consolidated revenue of approximately $1.2 billion. The company became the subject of a contested takeover when Sprint agreed to acquire it in 1993 in a transaction valued at approximately $3 billion in Sprint common stock. The proposed consideration was criticized by dissident Centel shareholders, who argued that the company was worth more. Although Centel shares had traded at $42.50 shortly before the merger announcement in May 1992, the transaction was commonly characterized by critics as a takeunder because its implied cash value was approximately $33.50 per share. Approval came by a narrow margin, with holders representing 50.5 percent of outstanding shares voting in favor. At the time of the acquisition, Centel supplied local telephone service to approximately 1.5 million lines in seven states, operated cellular businesses in 22 states, and employed about 9,300 people. Sprint renamed the cellular subsidiary Sprint Cellular Company and later spun it off as 360 Communications Company in 1996. Alltel acquired 360 Communications in 1998, and Verizon Wireless subsequently acquired Alltel in 2008. Sprint combined the former Centel local telephone operations with its own United Telephone business before spinning the resulting local telecommunications assets into Embarq in 2006. Embarq was acquired by CenturyTel in 2009; CenturyTel later became CenturyLink and was renamed Lumen Technologies in 2020. Some former local operations were divested to Brightspeed in 2022. Centel therefore survives primarily through the corporate and network lineage of businesses transferred to later telecommunications companies rather than as an active standalone brand.

Centel's history developed from the electrical and telecommunications enterprises assembled by Max McGraw. McGraw began with an electrical repair and supply shop in Sioux City, Iowa, in 1900. The business expanded into residential and industrial wiring, electrical distribution and electronics manufacturing. In 1922, McGraw entered telecommunications by purchasing Central Telephone and Electric Company of St. Louis. In 1926, more than 20 electric and telephone companies were consolidated into Central West Public Service Company. The electrical supply and manufacturing interests eventually formed the core of McGraw-Edison, while the telecommunications interests followed a separate succession of mergers, acquisitions, sales and reorganizations. That telecommunications group adopted the Centel name in 1982. Its main operating subsidiary, Central Telephone Company, supplied local telephone service in several American states. Important service areas included Las Vegas; selected Chicago suburbs and nearby Cook County communities; Tallahassee; and Charlottesville. Before the AT&T divestiture in 1984, Centel ranked among the largest telephone companies in the United States. Centel pursued a diversified communications model. In addition to local telephone networks, it operated cellular businesses and owned cable television systems. It also participated in Keyfax, a Chicago-area teletext and videotex venture with Honeywell and Field Enterprises. Keyfax was discontinued by 1986. During the late 1980s and early 1990s, Centel increasingly disposed of noncore assets. Its cable operations were sold in 1989 in six transactions involving systems in several states. In 1991, it sold electric utility properties in Kansas and Colorado to UtiliCorp United and also divested telephone operations in Iowa and Minnesota to Frontier Communications. These moves left telecommunications, especially local and cellular service, at the center of the company. Centel reported consolidated revenue of approximately $1.2 billion in 1991. Sprint's proposed acquisition, announced in 1992 and completed in 1993, became one of the defining events in the company's history. The transaction was structured as an exchange of Sprint common stock valued at approximately $3 billion. Shareholder opposition focused on the difference between Centel's pre-announcement market price and the consideration implied by the offer. Centel shares had traded at $42.50 before the announcement, while critics calculated the deal's cash equivalent at roughly $33.50 per share. The merger passed with only 50.5 percent of outstanding shares voting in favor. At acquisition, Centel had approximately 1.5 million local telephone lines in seven states, cellular operations in 22 states and 9,300 employees. Sprint renamed the cellular subsidiary Sprint Cellular Company, then separated it in 1996 as 360 Communications Company. Alltel purchased 360 Communications in 1998, and Verizon Wireless later acquired Alltel in 2008. The local telephone assets followed a different path. Sprint combined the former Centel local companies with its United Telephone operations, then spun the combined local business into Embarq in 2006. CenturyTel acquired Embarq in 2009 and subsequently changed its name to CenturyLink; CenturyLink became Lumen Technologies in 2020. Florida and Nevada operations remained associated with CenturyLink entities, while other former Centel assets changed ownership over time. Some local operations were divested to Brightspeed in 2022. The Centel corporate entity and brand therefore ended as an independent telecommunications company, but its former businesses continued through successive regional telephone, wireless and broadband operators.

• 2022

  Some former local operations move to Brightspeed

  [1]Centelen.wikipedia.org

  Certain former Centel local telephone operations were divested to Brightspeed.

• 2020

  CenturyLink becomes Lumen Technologies

  [1]Centelen.wikipedia.org

  The successor company to CenturyLink adopted the Lumen Technologies name.

• 2009

  Embarq is acquired by CenturyTel

  [1]Centelen.wikipedia.org

  CenturyTel acquired Embarq, bringing much of the former Centel local network lineage into the company later known as CenturyLink and Lumen Technologies.

• 2006

  Former Centel local operations enter Embarq

  [1]Centelen.wikipedia.org

  Sprint spun off the former Centel local telephone subsidiaries together with its United Telephone operations as Embarq.

• 1996

  Former Centel cellular business becomes 360 Communications

  [1]Centelen.wikipedia.org

  Sprint spun off the former Centel cellular operations as 360 Communications Company.

• 1993

  Sprint acquires Centel

  [1]Centelen.wikipedia.org

  Sprint completed its acquisition of Centel after a narrowly approved shareholder vote.

• 1991

  Electric holdings are divested

  [1]Centelen.wikipedia.org

  Centel sold its Kansas and Colorado electric properties to UtiliCorp United and continued narrowing its focus to communications.

• 1989

  Cable television assets are sold

  [1]Centelen.wikipedia.org

  Centel exited cable television through six transactions covering systems in multiple states.

• 1986

  Keyfax service ends

  [1]Centelen.wikipedia.org

  The Chicago-area teletext and videotex service in which Centel participated was discontinued.

• 1984

  Centel remains a major independent telephone company after AT&T divestiture

  [1]Centelen.wikipedia.org

  Following the breakup of AT&T, Centel was identified as the fifth-largest telephone company in the United States by the referenced account.

• 1982

  The Centel name is adopted

  [1]Centelen.wikipedia.org

  The telecommunications business adopted Centel as its corporate name.

• 1926

  Central West Public Service Company is formed

  [1]Centelen.wikipedia.org

  More than 20 electric and telephone companies were consolidated into Central West Public Service Company.

• 1922

  Entry into telecommunications

  [1]Centelen.wikipedia.org

  McGraw entered the telephone industry by acquiring Central Telephone and Electric Company of St. Louis.

• 1900

  McGraw Electric Company is founded

  [1]Centelen.wikipedia.org

  Max McGraw established the electrical repair and supply business that later provided the corporate roots of Centel's telecommunications operations.

A diversified regional communications operator focused on regulated local telephone networks while expanding into cellular communications and cable television.

• Fixed-line telecommunications

  Central Telephone Company local service

  Centel's principal operating business was local telephone service delivered through Central Telephone Company and related subsidiaries. The network served residential and commercial customers in regional exchanges across several states, with notable concentrations in Nevada, Florida, Virginia and the Chicago area. At the time of Sprint's acquisition, the business served approximately 1.5 million telephone lines in seven states.

• Mobile telecommunications

  Centel cellular service

  Centel operated cellular communications businesses in 22 states and was described at the time of its acquisition as the tenth-largest U.S. cellular company. After Sprint acquired Centel, the unit was renamed Sprint Cellular Company and was later separated as 360 Communications Company. It subsequently passed to Alltel and then into Verizon Wireless through later transactions.

• Cable television

  Centel cable television

  Centel owned cable television systems in several American markets, including parts of Florida, Ohio, Kentucky, Michigan and Illinois. The company sold the cable portfolio in 1989 through six transactions, transferring the systems to a succession of operators that ultimately included Comcast and Charter Communications in different markets.

• Teletext and videotex

  Keyfax

  Keyfax was a Chicago-area teletext and videotex service in which Centel participated with Honeywell and Field Enterprises. It represented an early attempt to deliver electronic information services over communications infrastructure, but the service was discontinued by 1986.

• 1993

  Acquisition by SprintM&A

  Background

  Sprint sought to acquire Centel's local and cellular communications assets. Dissident shareholders argued that the proposed consideration undervalued the company.

  Action taken

  Sprint acquired Centel in an exchange valued at approximately $3 billion in Sprint common stock.

  Aftermath

  Centel ceased to operate as an independent company. Its cellular and local telephone assets were later separated through different corporate transactions.

  Approximate transaction value. $3 billion (1993)

  Source

• 1991

  Sale of electric utility holdingsStrategy

  Background

  Centel continued to reduce businesses outside its communications focus.

  Action taken

  Centel sold electric properties in Kansas and Colorado to UtiliCorp United.

  Aftermath

  The transaction further concentrated Centel on local telephone and cellular communications.

  Sale consideration. $345 million (1991)

  Source

• 1989

  Exit from cable televisionStrategy

  Background

  Centel operated local telephone, cellular and cable businesses but began concentrating its portfolio on telecommunications.

  Action taken

  The company sold all of its cable television operations in six separate transactions.

  Aftermath

  The sales generated approximately $1.4 billion in aggregate revenue and a reported net gain of more than $500 million, according to the cited reference.

  Aggregate cable-operations sale proceeds. $1.4 billion (1989)

  Source

• 1998

  Alltel acquires 360 Communications[1]Centelen.wikipedia.org

  M&A

  Alltel acquired the former Centel cellular business, extending the post-Centel ownership chain in wireless communications.

• 1996

  Centel cellular operations are spun off as 360 Communications[1]Centelen.wikipedia.org

  M&A

  Sprint separated the former Centel cellular operations as 360 Communications Company while pursuing a distinct Sprint PCS wireless strategy.

• 1993

  Sprint completes acquisition of Centel[1]Centelen.wikipedia.org

  M&A · Leadership change

  Sprint acquired Centel for approximately $3 billion in Sprint common stock after a closely divided shareholder vote. Centel entered the transaction with about 1.5 million local telephone lines, cellular operations in 22 states and approximately 9,300 employees.

• 1993

  Centel cellular business is renamed Sprint Cellular[1]Centelen.wikipedia.org

  Leadership change

  Following the Sprint acquisition, Centel Cellular Company changed its name to Sprint Cellular Company.

• 1992

  Sprint announces acquisition of Centel[1]Centelen.wikipedia.org

  M&A · Lawsuit

  Sprint announced an agreement to acquire Centel in a stock transaction later completed in 1993. The proposed deal prompted an organized challenge from shareholders who considered the implied value inadequate.

• 1991

  Centel sells Iowa and Minnesota telephone operations[1]Centelen.wikipedia.org

  Other

  Telephone operations in Iowa and Minnesota were sold to Frontier Communications as Centel reshaped its regional operating footprint.

• 1991

  Centel sells electric utility holdings[1]Centelen.wikipedia.org

  Other

  Centel sold electric utility properties in Kansas and Colorado to UtiliCorp United for approximately $345 million, further concentrating the company on communications.

• 1989

  Centel exits cable television[1]Centelen.wikipedia.org

  Other

  Centel sold its cable television systems through six separate transactions covering operations in Florida, Ohio, Kentucky, Michigan and Illinois. The combined sales produced approximately $1.4 billion in revenue and a reported net gain exceeding $500 million.

• 1986

  Centel discontinues its Keyfax teletext and videotex service[1]Centelen.wikipedia.org

  Other

  Keyfax, a Chicago-area information service in which Centel held a stake alongside Honeywell and Field Enterprises, was discontinued.

• 1982

  Centel adopts the Centel corporate name[1]Centelen.wikipedia.org

  Other

  The telecommunications business descended from the McGraw group adopted the Centel name, establishing the identity used by the company until its acquisition by Sprint.

1. 1Centelen.wikipedia.org