Sprint Announces Plans to Buy US Cellular Customers and Spectrum for $480 Million

[dgstorm]

A deal has been struck between Sprint and US Cellular in which Sprint will acquire more spectrum and 10% of US Cellular's customers. Sprint will also need to take on some of US Cellular's “liabilities” although the specifics of that were not reported. Here is a quote with some of the details of the deal,

The arrangement will help Sprint bolster its own network as it rolls out LTE nationally, the company said in a press release, helping to beef up network capacity. U.S. Cellular customers in Illinois, Indiana, Michigan, Missouri and Ohio, 585,000 in total, will also become Sprint customers as part of the deal.

Sprint gets 20 MHz of PCS spectrum in the 1900 MHz band in a number of locales, and 10 MHz of PCS spectrum in the St. Louis market in exchange for its lump sum in addition to the subscribers. U.S. Cellular will continue to operate in its other existing markets once the deal goes through, which should happen sometime in the middle of next year, so long as government regulatory bodies including the Department of Justice and the FCC sign off on the deal.

For U.S. Cellular, the subscribers it’s giving up represent around 10 percent of its overall user base. For Sprint, the addition will help add to the 410,000 net subscriber additions they posted during their Q3 financial results.

Overall, this move is likely to make Sprint even stronger for the likely buyout by Softbank, and will also help strengthen Sprint's network expansion in the future.

As an interesting sidenote: a separate report suggests that Sprint plans to drop the Nextel name after the Softbank deal goes through.

Source: TechCrunch