Nextel Signs Preliminary Deal to Acquire Velocom

Digital trunking provider Nextel Argentina, a subsidiary of US holding company NII Holdings, has signed a preliminary deal to buy Argentine broadband network operator VeloCom, newspaper El Cronista reported.

The operation has first to be approved by Argentina's telecoms regulator CNC, although it is not yet clear when CNC will authorize the purchase.

Nextel has focused on a company like Velecom mainly due to its specialization in WiMax technology. Velocom is currently operating in the 2.5GHz spectrum band.

Velecom is owned by Argentine telecoms and IT holding company Datco, which also operates ViaNetworks, Silica Networks and Winstar.

According to Enrique Carrier, director of consultancy Carrier y Asociados, with the acquisition of Velocom, Nextel is imitating the strategy of US trunking operator Sprint Nextel (NYSE: S), which is migrating to WiMax to complement its mobile network coverage.

"This operation guarantees Nextel its evolution beyond being just a mobile operator and opens a new market to offer other types of services," Carrier told BNamericas.

According to Carrier, Nextel's intentions are similar to those of Mexican telecommunications giant Telmex (NYSE: TMX) which recently signed a preliminary deal to buy Argentine telco Ertach for US$22.5mn. Ertach also specializes in WiMax technology.

BNAmericas.com"

Posted to the site on 8th September 2006