AT&T Distributor Hawk Electronics Settles Disputes

By Josh Long

Hawk Electronics, a regional distributor for AT&T cellular products and services, has reached a settlement agreement with AT&T over arbitration that has been ongoing for more than two years.

The distributor, owned by Teletouch Communications and legally known as Progressive Concepts Inc., will get cash and other consideration of roughly $18.5 million under the settlement, Teletouch announced Monday.

Among other terms, Hawk Electronics has secured the right to sell, activate and provide services to Apple’s iPhone and iPad models as a distributor and to sell and activate such models as a dealer. The settlement also includes an amended and renewed three-year distribution agreement for all of Hawk’s current and prior market areas as well as a six-year exclusive dealer agreement.

T. A. “Kip” Hyde, Jr., president, chief operating officer and director of Teletouch, said the distribution and dealer agreements “will generate an additional $25-30 million incremental contribution margin to the Company over the term, based on historical results.”

“These agreements are of critical importance to our ongoing operations. Accordingly, we look forward to growing our core cellular services segment,” Hyde said. “With the cellular business stabilized and growing, we will once again have a solid operating platform to facilitate future organic growth in each of our business segments, as well as support for complementary acquisitions.”

Since September 2009, Teletouch has been involved in an arbitration proceedings with and against New Cingular Wireless PCS and AT&T Mobility Texas over distribution and related agreements, among other things, according to a regulatory filing. The companies have been negotiating a settlement for the last several months.